Hong Kong as China’s Jersey? How mainland China can still find a use for our city

Corporate change is gripping Hong Kong as our integration into China is being accelerated by the coronavirus and the national security law

Mainland influence in banking, aviation and other sectors suggests that the Hong Kong economy will be more domestically focused than the global entrepot it once was

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A staff member cleans one of HSBC’s historic lion sculptures ahead of their unveiling outside the bank’s headquarters in Central on October 22. The sculptures were restored after suffering damage during last year’s protests. HSBC has come under increased scrutiny of late amid US sanctions and fears that China might place it on an “unreliable entities” list. Photo: Felix Wong

Published: 4:30pm, 29 Oct 2020Updated: 10:20pm, 29 Oct 2020

When I first moved to America in 1984, AT&T provided monopoly telephone services to the whole of the United States and Canada. My impression of the company was undeniably positive. They provided me with a new phone line in two days – this was before mobiles – and gave me my future phone number there and then.

Monopoly power does not have to be a bad thing if it works in the interest of the customer. Admittedly, it rarely happens, hence the powerful US anti-trust laws that threatened the company’s forced break-up. AT&T voluntary spun off the “Baby Bell” regional telephone companies which cracked open the telephone service and equipment supply market to competition.

The recent announcement by the US Department of Justice to seek the break-up of Google is another exercise in anti-trust. It seems a perverse way to reward one of the most successful US companies in history. It might have been expected of the European Union, which has threatened to clip the wings of Big Tech for years.

We are told it is not related to the Trump administration’s ire over such companies adding a more balanced view to the president’s narcissistic belief in his skills in running the country. In any case, incoming Democrats are likely to have a similar view against oligopolistic powers, so Google has some thinking to do.

The break-up of big companies in America is nothing new. Standard Oil and American Tobacco were broken up in 1911. US Steel followed in 1920 and other behemoths, including Microsoft, have agreed to divestitures or settlements. Amazon, Facebook, Twitter, and even Apple are possible targets.

It seems ironic, in the land of capitalism, to break up not just large domestic companies but also global champions for doing stunningly well. On the other hand, it is a unique and beneficial element of American capitalism that companies are allowed to grow unfettered – up to a point. A split often means the sector gets a boost from increased competition, creativity and better use of capital.