HONG KONG — The jetliners serving this financial hub arrive with more empty seats these days, and lately it's easier to get a table at Harlan's oyster bar in the International Finance Center.
Across the bay in Kowloon, a salesclerk at Italy Fur & Fashion idles away the afternoon.
"Stocks, stocks, stocks!" she hollers, when asked why there were no customers, despite steep discounts on rack after rack of merchandise.
Hong Kong's stock market has fallen more than 50% this year, and analysts expect the economic slump to continue through at least next year. The Chinese territory is in recession, yet plenty of people here seem to be taking things in stride.
One reason is that Hong Kong has been through worse before; the last downturn lasted seven long years, from the Asian financial crisis in 1997 to the SARS epidemic in 2003. The other is a belief among some, in and outside Hong Kong, that the world economic order is shifting, from the West to the East, pushed by China's rapid growth and now the subprime financial contagion.
With the U.S. and Europe worse off than others, there's little doubt that more capital and talent will swing toward Asia. And few places look as well positioned as Hong Kong to take advantage of that.
In the financial world, "they will all tell you that there are three great listening posts: London, New York and Hong Kong," says Donald Straszheim, vice chairman of Newport Beach-based Roth Capital Partners and former global chief economist at Merrill Lynch in New York.
Although lacking the critical mass of London and New York, "Hong Kong is increasingly becoming globally important," he adds.
Hong Kong has long been Asia's most laissez-faire capitalist economy, with easy access for foreign investors, relatively low taxes and little government intervention. The latest financial crisis has Western governments promising tougher regulation of banks and trading houses, but people here don't think the clampdown in Hong Kong will be as hard. That could give it a competitive edge.
"This time, because of the turmoil, people want government to do more, but not to the extreme of the U.S., where the government takes control of everything," says Man Cheuk Fei, chief editor of Hong Kong Economic Journal. "Hong Kong senior officials argue that this is a golden opportunity to build one or two investment banks. . . . They can compete with the U.S. in the future."
