On June 27th, the Hong Kong Special Administrative zone celebrated the 15th anniversary of reunification with China. While a decade and a half of exemplary economic performance has sparkled against the West’s tepid results, a gray curtain of uncertainty has descended. Hong Kong wrestles with a global recession that refuses to go away, an ambivalent, at the best of times, relationship with Beijing and an economic battle to remain relevant with the emergence of competing Chinese coastal cities like neighboring Guangzhou and Zhuhai or booming mega-tropolis Shanghai. Can Hong Kong find new glitter in the curtain of gloom? They have before. By George Lauriat, AJOT Right from the beginning, Hong Kong has had a knack for exceeding expectations. Back in 1841, after Royal Navy Captain Charles Elliot secured the island for the Crown, Foreign Secretary Lord Palmerston expressed the widely held view of the value of the acquisition when he declared, “a barren rock with nary a house on it. It will never be a mart for trade.” For his troubles, Captain Elliot was “rewarded” with an appointment to the fledging Republic of Texas. History proved Lord Palmerston immensely wrong, but the Foreign Secretary could just have easily been right. At the time the China business was in Canton [Guangzhou], and the “entrepot” was the tiny Portuguese colony of Macau. What subsequently happened was Hong Kong became the premier “entrepot” of the China trade, and Macau was literally relegated to backwater status (albeit one of the world’s great gambling meccas). Over the years Hong Kong’s pre-eminent position in the China trade has periodically been challenged by mega-tropolis Shanghai, the defacto commercial capital city of the Yangtze River Delta (YRD) and China. But Hong Kong’s knack for re-inventing itself has kept the region relevant despite the numerous challenges. The territory went through a tremendous transformation following the reunification with China in 1997. Since that time, Hong Kong has been administered under the “One Country, Two Systems” policy, but Beijing may be leaning towards revising that arrangement. The reports of Hong Kong’s demise have been exaggerated With apologies to Mark Twain, in 1997 many Old China Hands (this writer included) felt the “Reunification” with China marked the demise of Hong Kong as the entrepreneurial outpost in Asia. China’s track record didn’t inspire a lot of confidence in a “One Country, Two Systems” policy that was installed to administer the territory (under Basic Law). Equally, Beijing’s emphasis on developing the Mainland’s own economic regions and institutions begged the question of Hong Kong’s potential usefulness in the future. Would Hong Kong become just another Chinese city? But fifteen years into the fifty-year program nearly all economically significant indicators are up (see chart.) The GDP per capita has risen from around US$27,000 in 1997 to over US$34,000 in 2011, a 27% increase. The merchandise trade value has soared from US$ 394 billion to US$910 billion over the same period. Stock market capitalization skyrocketed from US$411 billion to US$2,238 billion and listed companies increased from 658 to 1,326. Even airfreight and container throughput has increased despite the shift on transportation services to the Mainland. Airfreight increased from 1.77 million tons to nearly 4 million tons during the 15 years, and container throughput rose from 14.4 million teus to 24.4 million teus for the same period. Hong Kong survived not only “Reunification” but also the Asian Financial Crisis, SARS (severe acute respiratory syndrome), 9/11 and the ongoing global recession. The key reason for this continued success in adverse conditions was the territory was able to reprise its role as a revolving-door to China’s burgeoning economic expansion and expand its role as an exit point for Chinese investments abroad. To continue, in a broad sense as the “entrepot” to China and Asia as a whole, Hong Kong had to remain a safe haven for international business. In 2012,