The Myth of Hong Kong's Laissez-faire Economic Governance

The Myth of Hong Kong's Laissez-faire Economic Governance: 1960s and 1970s In this paper, I shall argue that the labels of "laissez-faire model," "developmental statism" and "positive non-interventionism" are all inappropriate to describe the actual role of the colonial government in the process of economic restructuring in Hong Kong - from an entrepot to a labour-intensive and export-oriented industrial city. Evidence shows that the selective interventionist approach of the government was hinged on its prime concern for the interests of Britain and British hongs (trading houses). The colonial government maintained an institutional framework which favoured economic activities in general, and favoured the commercial/financial sector in particular. The government co-operated with the British expatriate conglomerates in improving local infrastructure, public utilities, banking and financial system, as well as international trade networking. Many local Chinese industrialists also relied on the resources of the hongs and formed a kind of "strategic symbiotic relation" with them. The hongs made great efforts to keep an intimate capital-state linkage. Representatives of the hongs had the right to vote in the Legco and Exco. They got first-hand information and overview on the government's plans/policies in advance. They had to defend their own business interests in the Legco and/or Exco decision-making process. Hence, the selective interventionist role of the Hong Kong government in the economy was related with the colonial regime on the one hand and the strategic relations among the government, the British hongs and the local Chinese industrialists on the other.