'I Was Scared to Death'

What makes you think so?
Look at the environment. The fundamental issue is not regulation but morality. If I don't care about the people next to me, how much can I care about trees and animals in the forest, the birds in the air or the fish in the water?

When do you think this crisis could occur?
I have no sense of the timeframe, but things are heating up. The craziness you see in the stock market is a sign that things may have gone too far already.

China has expanded for the last 20 years. And so far everybody that predicted when it would end has been wrong. But one day they will be right. The government has tried so hard to make the [2008] Olympic Games a success. They have distorted a lot of investment and a lot of infrastructure development [to achieve that], and such waste could be the fatal blow.

Is Hong Kong's economy at risk from competitors like Shanghai and Singapore?
No. Hong Kong still has financial integrity, professionalism, rule of law and transparency. All that will draw in the biggest financial deals. It's very natural. Before China allowed its citizens to visit, our private hospitals were almost dying. Now they're all full. You can't just walk in and get a [hospital] room because Chinese who are rich enough and do not trust their own hospitals are there. If you believe Hong Kong's rule of law, free-flowing information, professionalism and integrity are part of our comparative advantage, you can assume that the more we integrate with China the more our advantages will be manifested in other areas.

Such as?
Insurance. Legal matters. Anything where you have to trust the system, obey the law and respect contracts—as they don't do in China—will gravitate here.

At the end of the day, Hong Kong's competitive advantage is the legacy of a Westernized, cosmopolitan city that we inherited from the British. This Beijing understands. To keep Hong Kong prosperous, you have to preserve its integrity as an international city.

© 2007