Fading Dragon
The word in Asia is that Hong Kong may be a has-been. In April, Chinese officials announced they want Shanghai to become a global financial center by 2020. Premier Wen Jiabao then told Hong Kong to raise its game or face decline—chilling news for the Hong Kong Stock Exchange, where more than 70 percent of daily trading is in shares of Chinese mainland firms, many of them state-run enterprises that Beijing could easily order to trade in Shanghai. Like most financial centers at the moment, Hong Kong is in a drastically weakened state: GDP shrank 7.8 percent in the first quarter of 2009, even as China's continued to grow. So, Hong Kong is looking to expand beyond financial services, on which its entire economy is now based. It's adapted before; in the span of 50 years, Hong Kong went from selling cheap plastic flowers to becoming a global financial capital. One possibility is to rebrand it as a consulting hub, helping less-sophisticated Chinese businesses sell themselves to international audiences. For now, at least, Hong Kong still has key advantages over Shanghai, including a fully convertible currency, as well as the perception that it's a fairer, better-governed financial capital than Shanghai. Should it lose that, though, it's sure to become, as former Chinese premier Zhu Rongji predicted a few years back, Toronto to Shanghai's New York.
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Rana Foroohar is the deputy editor in charge of international business and economics coverage for Newsweek. She conceives and edits a weekly section of breaking news stories, features and guest articles. She also writes economic cover stories and opinion pieces, and pens a bi-weekly column on the global economy.
Foroohar oversees Newsweek's team of global correspondents and stringers, directing their reporting on the week's business news. She edits regular columnists such as hedge fund manager Barton Biggs, Morgan Stanley emerging markets head Ruchir Sharma, Yale professor Jeffrey Garten and PIMCO CEO Mohamed El-Erian. She is in charge of economic coverage for Newsweek's annual Davos special issue, which features pieces by world leaders and economic thinkers, and also chairs panel discussions while at the World Economic Forum in Davos.
Prior to taking this New York based position in 2007, Foroohar spent six years as Newsweek's European Economic Correspondent based in London, covering Europe and the Middle East. During this time, she was awarded the German Marshall Fund's Peter R. Weitz Prize for transatlantic reporting. She has also worked as a general editor at Newsweek, a reporter for Forbes magazine, and as a writer and editor at various other national and international publications. Foroohar graduated in 1992 from Barnard College, Columbia University, with a B.A. in English literature. She is a life member of the Council on Foreign Relations.
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