Goodbye to Hong Kong, Hello to a New Prosperity
McRae, Hamish, The Independent (London, England)
This year is going - with utter certainty - to be the end of an era in British history. No, that is not a comment about the result of the forthcoming general election. Something much more important is drawing to a close: this year sees the end of colonialism. The process of decolonisation, which began in earnest with India half a century ago, ends with the handover of Hong Kong.
If the period of history is finished, a legacy lingers on, and it is a legacy which will become increasingly important as we move into the next century. For the past 50 years the economic impact of empire has probably on balance been negative. In the early part of the period there was an enormous and continuing defence burden. The illusion of grandeur encouraged sloppy thinking among politicians, while the existence of still-captive markets encouraged an even more destructive sloppiness among our exporters. In any case, with a couple of exceptions of which Hong Kong is a prime example, the former colonies were not particularly fast- growing markets: even if we did retain some sort of inside track, it was of little economic advantage.
For the next 50 years, this will all change. For a number of unrelated reasons the legacy seems likely to become positive. Most obviously the hand-over of Hong Kong clears the way for a more relaxed relationship with what will, within the next 15 years, become the world's largest economy. Two centuries ago, before the engine of industrialisation began in Europe and then North America, China was by far the world's largest economy. Since the market reforms of 1979 (much more important than the modest changes we made here), China's economic take-off seems certain to push it back to that earlier dominance. Establishing a mature and comfortable relationship with China has been impossible up to now - a point indirectly acknowledged by Chris Patten in his interview in this newspaper today. Once the handover is complete, and the land has been handed back in rather better nick than it was taken over, the basis for an adult relationship will again exist. The second reason to be positive about the legacy of empire is that the relative growth performance of several former colonies seems likely to improve over the next 50 years. The most obvious example is that other giant, India. Two centuries ago, India was second to China in the size of its economy - that is why we wanted to get our paws on it - but the economic performance through the post-war period has been disappointing. But India too is now starting to recover. Its take-off will not have the astonishing vigour of China's, and in any case it is still the best part of a generation away. Nevertheless, given its size, even a modest change in performance will have a dramatic impact not just on the subcontinent, but on the rest of the world. …