IMD competitiveness report a real slap in the face for Stephen Roach 
By Tu Haiming
After asserting “Hong Kong is over” in a February article, Stephen Roach, a senior fellow at Yale University, doubled down on peddling his “Hong Kong doom” narratives in another article, titled Resignation Bordering on Despair, earlier this month. To the disappointment of those who wish Hong Kong ill, both articles offered no convincing arguments, aside from political rhetoric, which shouldn’t have been part of an economist’s work.
Shortly after Roach dished out the “resignation bordering on despair” narrative about “a darkening mood” in both Beijing and Hong Kong, the International Institute for Management Development (IMD) on Tuesday released its World Competitiveness Yearbook 2024, which ranks Hong Kong the fifth-most competitive among 67 economies in the world, up from seventh in 2023. The latest reading of the IMD index, which covers not only GDP and productivity but also political, social and cultural dimensions, is nothing short of a slap in the face to Roach.
The way Roach repeatedly shot from the hip has dumfounded many. His “Hong Kong doom” narrative contains at least three major fallacies:
Fallacy No 1: Prioritizing politics over economic data
The Hong Kong Special Administrative Region government rightly refuted Roach’s gloomy forecast made in his first article with concrete data, including economic growth, the stock market performance, talent admission, and the number of foreign-funded enterprises. To the surprise of many, Roach ridiculed that data as a “public relations spin that one might expect from a tourist bureau”.
It is certainly beyond imagination that an economist would have simply swept aside important economic indicators as “public relations spin”. In sharp contrast with the way the HKSAR government presented significant economic indicators to support its argument, Roach offered only politically charged allegations. For instance, he talked about “mounting political constraints in the aftermath of March’s hasty enactment of Article 23 of Hong Kong’s Basic Law”, and said that “political autonomy is essential if Hong Kong is to take aggressive policy actions that might enable it to outperform the weak Chinese economy to which it is shackled”, etc, without providing any evidence.
That an economic analysis entails economic data is common sense. As a matter of fact, not only has the HKSAR government released economic indicators that indicate a steadily improving economy, but some acclaimed global institutions have provided assessments and forecasts that have pointed to a similar conclusion.
The IMD World Competitiveness Yearbook is a case in point. Hong Kong ranks third globally in “government efficiency”; the city’s “economic performance” rose to 11th from 36th; “business efficiency” jumped to seventh from 11th; and “infrastructure” climbed to ninth from 13th. Hong Kong also ranks first in both the subindicators of “international trade” and “business legislation”; and its rankings in “international investment”, “tax policy”, “finance”, “basic infrastructure” and “education” also remain among the top five in the world among its peers.
Fallacy No 2: Arguments hinged on flawed reasoning
Any serious economist would have conducted diligent research and study before making any conclusion. However, Roach came up with his “Hong Kong is over” and “resignation bordering on despair” narratives without offering any supporting evidence.
First, there is no basis for his “weak Chinese economy” notion. Whereas Roach suggested that Hong Kong should unshackle from the “weak Chinese economy”, the World Bank’s latest Global Economic Prospects report, released on June 11, suggested otherwise. The bank now predicts a 4.8 percent GDP growth for China in 2024, or 0.3 of a percentage point higher than its January forecast, after taking into consideration China’s robust economic activities early this year, especially in exports. As the global economy is forecast to grow by only 2.6 percent this year, China’s expected growth rate is nearly twice that of the global average; this in no way supports Roach’s “weak Chinese economy” notion. Moreover, China registered a 5.3 percent economic growth in the first quarter.
Second, Roach claimed that his assessment of Hong Kong was based on discussions with Hong Kong’s best and brightest professionals from all walks of life. But information gathered from a small batch of people is unreliable. As we all know, rigorous assessment requires studies and analyses underpinned by scientific methods and indicators involving feedback collected from a large sample, rather than just a few people. Roach’s visit to Hong Kong was a “quick tour”; the limited number of people with whom he talked in no way gives a representative view of Hong Kong’s economy.
Third, Roach cited the resignations of British judges from Hong Kong’s top court to support his narratives, which does not make sense. Failing to come up with economic data or indicators to support his gloomy economic forecast, Roach cited the recent resignation of Jonathan Sumption for his “Hong Kong doom” narrative, pretending not to know that Sumption’s resignation and politically charged allegations against Hong Kong were the outcome of political pressure from the UK government and politicians, which has nothing to do with the economy. For instance, Sumption’s allegation of “an outbreak of judicial patriotism” hardly makes any sense. If safeguarding national security in Hong Kong was “an outbreak of judicial patriotism”, then the UK’s National Security Act 2023, which is more stringent than Hong Kong’s national security laws in many aspects, would have demonstrated a bigger “outbreak of judicial patriotism”.
Fallacy No 3: Sensational remarks devoid of logic
Roach’s articles do not feature an economist’s rigorousness and cogency but sensationalism. Sensationalist narrations, such as “The spark is gone,” “There can be no mistaking a darkening mood in both cities (Beijing and Hong Kong),” “To me, that sounds like the proverbial frog in a boiling pot of water,” and “Little wonder that the mood is so bleak in this once-extraordinary city” offer no value, but display strong political undertones.
Any person in his right mind can easily discern the fallacies in Roach’s unsubstantiated allegations and sensationalist statements. Evidently, Roach is now obsessed with politics but not economics. What is “over” is not Hong Kong, but perhaps his reputation as an economist.
The author is vice-chairman of the Committee on Liaison with Hong Kong, Macao, Taiwan and Overseas Chinese of the National Committee of the Chinese People’s Political Consultative Conference, and chairman of the Hong Kong New Era Development Thinktank.
The views do not necessarily reflect those of Bauhinia Magazine.
Source: ChinaDaily
https://res.youuu.com/zjres/2024/6/24/o6isdJRCsGwy2PfCT9AuVFuvNd2uQTeinHN.jpg
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By Tu Haiming
After asserting “Hong Kong is over” in a February article, Stephen Roach, a senior fellow at Yale University, doubled down on peddling his “Hong Kong doom” narratives in another article, titled Resignation Bordering on Despair, earlier this month. To the disappointment of those who wish Hong Kong ill, both articles offered no convincing arguments, aside from political rhetoric, which shouldn’t have been part of an economist’s work.
Shortly after Roach dished out the “resignation bordering on despair” narrative about “a darkening mood” in both Beijing and Hong Kong, the International Institute for Management Development (IMD) on Tuesday released its World Competitiveness Yearbook 2024, which ranks Hong Kong the fifth-most competitive among 67 economies in the world, up from seventh in 2023. The latest reading of the IMD index, which covers not only GDP and productivity but also political, social and cultural dimensions, is nothing short of a slap in the face to Roach.
The way Roach repeatedly shot from the hip has dumfounded many. His “Hong Kong doom” narrative contains at least three major fallacies:
Fallacy No 1: Prioritizing politics over economic data
The Hong Kong Special Administrative Region government rightly refuted Roach’s gloomy forecast made in his first article with concrete data, including economic growth, the stock market performance, talent admission, and the number of foreign-funded enterprises. To the surprise of many, Roach ridiculed that data as a “public relations spin that one might expect from a tourist bureau”.
It is certainly beyond imagination that an economist would have simply swept aside important economic indicators as “public relations spin”. In sharp contrast with the way the HKSAR government presented significant economic indicators to support its argument, Roach offered only politically charged allegations. For instance, he talked about “mounting political constraints in the aftermath of March’s hasty enactment of Article 23 of Hong Kong’s Basic Law”, and said that “political autonomy is essential if Hong Kong is to take aggressive policy actions that might enable it to outperform the weak Chinese economy to which it is shackled”, etc, without providing any evidence.
That an economic analysis entails economic data is common sense. As a matter of fact, not only has the HKSAR government released economic indicators that indicate a steadily improving economy, but some acclaimed global institutions have provided assessments and forecasts that have pointed to a similar conclusion.
The IMD World Competitiveness Yearbook is a case in point. Hong Kong ranks third globally in “government efficiency”; the city’s “economic performance” rose to 11th from 36th; “business efficiency” jumped to seventh from 11th; and “infrastructure” climbed to ninth from 13th. Hong Kong also ranks first in both the subindicators of “international trade” and “business legislation”; and its rankings in “international investment”, “tax policy”, “finance”, “basic infrastructure” and “education” also remain among the top five in the world among its peers.
Fallacy No 2: Arguments hinged on flawed reasoning
Any serious economist would have conducted diligent research and study before making any conclusion. However, Roach came up with his “Hong Kong is over” and “resignation bordering on despair” narratives without offering any supporting evidence.
First, there is no basis for his “weak Chinese economy” notion. Whereas Roach suggested that Hong Kong should unshackle from the “weak Chinese economy”, the World Bank’s latest Global Economic Prospects report, released on June 11, suggested otherwise. The bank now predicts a 4.8 percent GDP growth for China in 2024, or 0.3 of a percentage point higher than its January forecast, after taking into consideration China’s robust economic activities early this year, especially in exports. As the global economy is forecast to grow by only 2.6 percent this year, China’s expected growth rate is nearly twice that of the global average; this in no way supports Roach’s “weak Chinese economy” notion. Moreover, China registered a 5.3 percent economic growth in the first quarter.
Second, Roach claimed that his assessment of Hong Kong was based on discussions with Hong Kong’s best and brightest professionals from all walks of life. But information gathered from a small batch of people is unreliable. As we all know, rigorous assessment requires studies and analyses underpinned by scientific methods and indicators involving feedback collected from a large sample, rather than just a few people. Roach’s visit to Hong Kong was a “quick tour”; the limited number of people with whom he talked in no way gives a representative view of Hong Kong’s economy.
Third, Roach cited the resignations of British judges from Hong Kong’s top court to support his narratives, which does not make sense. Failing to come up with economic data or indicators to support his gloomy economic forecast, Roach cited the recent resignation of Jonathan Sumption for his “Hong Kong doom” narrative, pretending not to know that Sumption’s resignation and politically charged allegations against Hong Kong were the outcome of political pressure from the UK government and politicians, which has nothing to do with the economy. For instance, Sumption’s allegation of “an outbreak of judicial patriotism” hardly makes any sense. If safeguarding national security in Hong Kong was “an outbreak of judicial patriotism”, then the UK’s National Security Act 2023, which is more stringent than Hong Kong’s national security laws in many aspects, would have demonstrated a bigger “outbreak of judicial patriotism”.
Fallacy No 3: Sensational remarks devoid of logic
Roach’s articles do not feature an economist’s rigorousness and cogency but sensationalism. Sensationalist narrations, such as “The spark is gone,” “There can be no mistaking a darkening mood in both cities (Beijing and Hong Kong),” “To me, that sounds like the proverbial frog in a boiling pot of water,” and “Little wonder that the mood is so bleak in this once-extraordinary city” offer no value, but display strong political undertones.
Any person in his right mind can easily discern the fallacies in Roach’s unsubstantiated allegations and sensationalist statements. Evidently, Roach is now obsessed with politics but not economics. What is “over” is not Hong Kong, but perhaps his reputation as an economist.
The author is vice-chairman of the Committee on Liaison with Hong Kong, Macao, Taiwan and Overseas Chinese of the National Committee of the Chinese People’s Political Consultative Conference, and chairman of the Hong Kong New Era Development Thinktank.
The views do not necessarily reflect those of Bauhinia Magazine.
Source: ChinaDaily
https://res.youuu.com/zjres/2024/6/24/o6isdJRCsGwy2PfCT9AuVFuvNd2uQTeinHN.jpg
