WA China Watch Digest Special!

Interview: Andy Yip on Hong Kong’s return to China 20 years later, and Washington-Hong Kong trade

Andy Yip in Chicago at Think Asia, Think Hong Kong event, 2015By Wen Liu   July 12, 2017

It is hard to believe but it is already twenty years since Hong Kong's return to China on July 1, 1997, and China's adoption of the “one country, two systems” policy for the former British colony, which allows Hong Kong to retain its capitalist economic system, legal system, legislative system, and people's rights and freedom for fifty years, till 2047. President Xi Jinping said in Hong Kong that “one country, two systems” was a great success. But thousands of Hong Kongers disagreed by demonstrating in the streets. So how does one see the 20th anniversary? What has changed in Hong Kong since the return? For these and other questions, we have Andy Yip, VP of Hong Kong-Greater China Business Association of Washington, a finance and real estate professional, born and raised in Hong Kong, a Seattleite since 1995, with an economics degree from the UW:

WCWD: July 1 marked the 20th anniversary of the return of Hong Kong to China from Britain as a former colony. President Xi Jinping was in Hong Kong for the celebration. He reviewed the People’s Liberation Army troops stationed there, swore in Hong Kong’s new Chief Executive Carrie Lam, talked about how the “one country, two systems” policy was a great success, and warned against any attempt to endanger China's sovereignty and security. As someone who grew up in Hong Kong but left before the return, what did you think of the anniversary or the celebration?

Andy Yip: The celebration was an important step in strengthening the "one country, two systems" policy, and President Xi had it just right: being in Hong Kong for the ceremony to establish the trust of the central government toward the new Chief Executive, but it was not overdone as to deepen the gap between the political parties.

WCWD: Hours after Xi Jinping left Hong Kong, however, thousands turned out in Victoria Park for their annual pro-democracy march, protesting against the Chinese power, and demanding greater autonomy, universal suffrage, free speech, the release of Liu Xiaobo, the imprisoned Nobel Peace laureate on medical parole with late-stage cancer, and even independence. The young protest leader Joshua Wong said that “one country, two systems” had become “one country, one-and-a-half systems.” What do you think of the protest or do you agree with the protestors?

Andy Yip: Much like in the U.S., Hong Kong has a constitution that protects free speech, and it is the right of the citizens to organize events to voice their concerns. It is important for the protestors to remember that changes from a political system level does not come easily, especially the demand for universal suffrage from a sovereign power that has never held an election before. The central government is making strides and policies that are beneficial to Hong Kong and its citizens. As with all hard choices, protestors should weigh the pros and the cons. Is it better to march toward universal suffrage in baby steps and improve along the way, or do they take an all-or-none approach?

WCWD: We all know the stories from 2015 of the abduction and detention by China’s security of the Hong Kong publisher and sellers of books critical of Chinese leaders. What was your understanding of the events?

Andy Yip: The official word was that the publisher returned to China voluntarily, and he has come out and said it, and since then, he has returned to Hong Kong, then back into China. There is no evidence to question this otherwise. Are there theories out there? Of course there are, but they are yet to be proven with facts, by both authorities in Beijing and Hong Kong, and the publisher himself has not cried foul.

WCWD: You probably travel regularly to Hong Kong on business and family visits. What changes have you witnessed or experienced in Hong Kong over the years since the return, in daily life and in doing business?

HKBAWAndy Yip: During the early years of the return to China (right after 1997, that is), we clearly witnessed a downturn in sales and tourism across the board. It was expected as the return to China's sovereignty brought many unknowns. Since then, China has made many beneficial policies to entice Chinese Nationals to tour and shop in Hong Kong with greater ease, in an effort to jump start the economy. The effectiveness of this policy is clear, as both tourism and sales have jumped so much that Hong Kong citizens have shifted their concerns from the loss of business to inflation of commodities and real estate prices because of the great interest from across the border. The recent civil unrest stems from the fact that the balance of spending power has shifted since 1997, and some citizens of Hong Kong fear that both political and spending power of mainlanders will tip the scale for local Hong Kong population, creating a disparity in business opportunities.

WCWD: In 2014, you were part of an event in Seattle titled “Think Asia, Think Hong Kong!" and on a panel discussion and talked about Hong Kong as a key platform in supply chain management for U.S. companies. Could you tell us a little bit about the current business relations and opportunities between Hong Kong and Washington state?

Andy Yip: Hong Kong has long served as the gateway into China, given its advantageous policies in both being free of corruption and the rule of law. A sound financial system is also needed to maintain stability of any trade relationships. Hong Kong is in the ideal location where the cultures of east and west live in harmony. A diverse work force that speaks both Chinese and English, with an understanding of both cultures, is also crucial from a human resource standpoint. All of these reasons, combined with the central location of Hong Kong, being able to reach half the world's population in 5-hours' flight time makes it the obvious choice as their Asia headquarters when companies do business in Asia.

Washington state is unique in that it is the closest trade route to China by sea, and 40% of the jobs in Washington state are trade dependent. Currently, Hong Kong maintains the position as the 7th largest trade partner with Washington state. With a population of just over 7 million, it is obvious that a lot of goods are being re-exported into China via Hong Kong, and Hong Kong continues to fulfill its mission as the super-connector between the United States and China. In the foreseeable future, it shouldn't surprise anyone that foreign direct investments from China will continue to focus on research and development, since China is lagging behind U.S. in innovation, and the sectors that it will focus on will be smart cities applications, environmental friendly technologies, and life science, in which Washington state is leading the nation.

(For more information on major events in Washington state-China relations, go to WA China Chronicle.)