Hong Kong and the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) will be at the epicentre of a world that sustainably brings prosperity to its population.
This was the bold vision spelt out by Prof Jeffrey Sachs, a renowned economist and President of the UN Sustainable Development Solutions Network, at the keynote luncheon on the first day of the Asian Financial Forum last week.
The GBA had become the most dynamic economy of the world, he said, and the Belt and Road Initiative was a very important project that warranted expansion.
“We need to harness the potential that technologies give us. All solutions lie within a small radius of where we are now.”
Prof Sachs noted the potential for synergy. Hong Kong was a key financial centre and Mainland China, especially neighbouring Shenzhen, was a technology powerhouse.
“I have just visited Shenzhen, four years after my previous visit. Progress at Huawei was astounding. Four years ago, no one was on 5G networks. Now 1.2 billion people are!”
Prof Sachs had spent the previous two weeks travelling in Southeast Asia and saw technological solutions everywhere in the booming region.
“There is no reason for conflict,” he believed. “Especially between the United States and China.”
Turning to a cause that should unite everyone, Prof Sachs pointed out that sustainable development worldwide would require investment of US$5-10 trillion a year, and as a leading financial centre Hong Kong could step up to provide this.
Looking at where such investment should go, he named green infrastructure investment as another necessity, emphasising that striving for net zero within any one country’s border was worthless.
“We need an ASEAN grid,” he said, referring to an electric power network crossing the Southeast Asian region. “And extend the power system across RCEP, drawing power from as far away as Australia.”
Such development required complex, blended, long-term finance.
Professionals devising such innovative financing are working in a fast-changing economic environment. Prof Sachs said: “We are in an era of economic convergence, with less-developed countries rapidly catching up.” Between 1980 and 2020, Mainland China’s economy had doubled in size every seven years.
“If you put in place good planning and policies, it is hard to avoid achieving solid growth,” he said.
“In the 19th and 20th centuries, the West leapt ahead because of its industry,” Prof Sachs pointed out. “What followed was empire, with colonial powers deliberately stunting development in the countries they held.”
At the peak of empire, 1950, Asia accounted for just 20% of global GDP against 60% in the West. Historically Asia, with 60% of the world’s population, had accounted for the same proportion of GDP. Current expansion in Asian countries would soon restore the historical ratio.
“The good news is Asia has all the resources it needs.”
Giving an example of Mainland China supporting Africa through technology, Prof Sachs referred to Ethiopia where farmers now trade their products digitally and ship them on a railway built with Mainland China’s help. There was great potential for more such progress.
Echoing the AFF theme of Multilateral Cooperation for a Shared Tomorrow, he said: “In the 1500s, the Indian Ocean was the ocean of peace,” adding that he believed India, China and Africa should work together to restore this.
Responding to a question from Ronnie C. Chan, Hang Lung Properties Chair and moderator of the session, Prof Sachs said the relative decline of the US dollar was inevitable, but would have a limited impact on the real world.
“Money comes with a veil,” he said. It was possible to exchange value in a wide range of systems, including digital ones. He pointed to the relatively benign switch from pound sterling to the US dollar in the early 20th century.BRICS was already working on an alternative and the world needed to plan for an increase in renminbi use.