London must take a leaf from Hong Kong's book to thrive amid Brexit uncertainty

Simon Squibb
Hong Kong Handover
When Hong Kong was handed over to China, many thought its days were finished (Source: Getty)

With Article 50 signed, sealed and delivered, we are heading into a new chapter of uncertainty. And this is the reason why, after 20 years building my career as an entrepreneur and investor in Hong Kong and Asia, I am uprooting and returning to London.

I have seen first-hand how Hong Kong has evolved since sovereignty was handed back to China from the UK in 1997. The UK is on a similar path today.

London and Hong Kong are comparable in many ways, not least because both are international financial services hubs, attractive markets for entrepreneurs and big brands, and desirable places for great talent to live.

What I witnessed two decades ago was fear of change. Hong Kong was so entrenched in the UK ecosystem, the handover threw the region into uncertainty. Many scaled back investment, property prices came under pressure, and many more emigrated believing it was the beginning of the end of Hong Kong. Inbound migration also came under pressure as China wanted fewer westerners living there.

Read more: Brexit: Slashing tax and red tape will turn Britain into the next Singapore

Despite all this, the region thrived. So, what can we learn from Hong Kong’s journey?

While I’m not suggesting this will all happen to the UK, like Hong Kong, we are likely to see gaps emerge in the private sector. One example is the creative sector, which took a nose dive when companies and talent left the region in 1997. Enterprising entrepreneurs took the opportunity to establish, fill the gap and flourish.

For the Hong Kong government, it was important to identify, protect and improve key aspects that enabled economic prosperity. It fought hard to ensure that strong intellectual property protection laws, financial regulation and tax systems did not change under Chinese rule. We must follow Hong Kong’s footsteps to quickly identify initiatives to maintain London’s leading status.

Hong Kong’s government was also quick to realise that, at a time of change, it could not afford for uncertainty to overshadow the need for growth. Consequently, significant investment was made to ensure Hong Kong remained a desirable place to live. Strong infrastructure programmes like expanding the metro made the region more efficient, safe, and exciting.

Read more: Hong Kong follows UK lead with fintech "sandbox"

What the government did fail to do, in my view, was incentivise a balanced political system, and I fear this could happen in the UK too. You need strong opposition to maintain the balance. If one party becomes too strong, it can lead to movements that aim to force change, divide the people and alienate some such as the Umbrella movement in Hong Kong, which upset China’s political elite by demanding a leader of their choosing and even suggested a split from the mainland.

Periods of uncertainty should always be a time for reflection. Brexit should be a time for us all to look further afield and reassess where new prosperity can be found. Having just come from Asia, I believe there’s a significant opportunity for us to build stronger trade relationships in the region with markets like Hong Kong. It’s a much larger opportunity than trade with the EU in the long term.

Businesses can thrive and economies grow by capitalising on uncertainty. The UK has more than a fighting chance of staying a financial hub and becoming a world-leading startup and innovation destination. But businesses and government must take a leaf from Hong Kong’s book and take the right steps in protecting what’s worked, as well as to build new trade routes to huge markets like Asia.

Welcome to a new chapter of irresistible uncertainty.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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