Americans Can Learn a Lot From Hong Kong’s Connectivity

HONG KONG —  From the green hills above Kowloon, overlooking one of the most breathtaking skylines on Earth, one gets a glimpse of the future. It seems obvious here in this city of nearly 7 million people that this century will belong to China.

Hong Kong has been a gateway for the west to China since its founding by British colonists in 1842. For most of that time, the medium of communication was maritime commerce, and Hong Kong is still the busiest port in the world. Now Hong Kong is poised to enter a new relationship with China, and its new medium will be digital bits on telecommunications networks.

Whenever China is the subject of economic forecasts, the numbers involved are just numbing. Last week, a news release by the investment firm Salomon Smith Barney reported: “The number of people that can afford most tech products in China will likely grow from the current 350 million to 630 million in 2005 as incomes rise and costs fall.”

The latter figure, of course, is more than double the entire population of the United States. “Soon,” said Salomon Smith Barney, “China should become the world’s major market for most tech products.” The company also predicted that by 2010, China will become Asia’s biggest exporter of technology, surpassing Singapore, Taiwan, Malaysia and even Japan.

China already has more than 120 million mobile phone users. The country has about 16 million Internet users, but analysts estimate China should have more than 40 million by this time next year.

In Hong Kong, an astonishing 80% of the city’s population uses mobile phones. The trilling songs of phones are heard everywhere.

Internet use in Hong Kong is roughly comparable to the U.S. in percentage terms--between a third and a half of the population is online--but more Hong Kong Net users access the Internet using broadband, or high-speed, connections. In Hong Kong, broadband is available everywhere, and there are entire zones of the city with high-speed wireless Internet access too. Hong Kong was the first city with on-demand video, and it leads the world in the use of “smart cards.” Consumers can even use a smart card here to pay for horse-racing bets.

Over the next two years, China is expected to open up its incomparably huge telecommunications market. Hong Kong firms are positioning themselves to be the primary players, and in turn make Hong Kong one of the most important cyber-cities in the world. They are building a new CyberPort, a concentration of high-tech businesses, and have invested in a comprehensive plan for delivering broadband learning content to Hong Kong schools. Nearly all local K-12 schools have high-speed network connections.

Perhaps most important in the cultural mix of this city is the well-known obsession of Hong Kong people: making money. It is a source of both pride and complaint here. The chic bars and restaurants are packed with wealthy and fashionable young people all jabbering in the latest e-business jargon. Business stories run on the front pages of the local newspapers.

Yet even with optimism about the next few years because of immense new opportunities in China, there also is a sense that Hong Kong is still very much dependent on the West. The Hong Kong dollar is tied to the value of the U.S. dollar, and interest rates are linked too. But more important is the fact that nearly every technology product of significance used in Hong Kong was created in the U.S. People use Palms, Dell computers, Microsoft software and even models of e-commerce that originated in the U.S.

I have met young Chinese here who can write computer programs, play Mozart, beat me at video games, talk about American skateboard culture and stand on the subway studying analytical calculus. After seeing all this, it doesn’t take much imagination to foresee the U.S. being eaten alive, economically, in the next few decades.

And yet the United States has a critical advantage that China does not: mostly young people who “think outside the box,” as the saying goes. It’s difficult to imagine, for example, a Chinese version of Shawn Fanning, the Boston college student who created Napster and rocked the world’s music industry. Few people in Hong Kong seem to even grasp the significance of open-source software and Linux, which has swept the culture of young programmers in the U.S. in the last few years as an alternative to Microsoft. Young Chinese are wild about computer games--the computer game market in Asia is almost too immense for mortal minds to comprehend. But the games they play come from the U.S.

What’s ironic is that it seems that many American leaders would like the U.S. to be more like China and Hong Kong--disciplined, focused on making money, respectful of authority, masterful at math and science and with a political culture overwhelmed and overshadowed by commercial and financial ambitions. All of that has certainly created a spectacular and unimaginably rich city here, one that may be the model for mega-cities worldwide.

But America’s comparative advantage is, strangely enough, not business stability and discipline but “creative destruction,” as economist Joseph Schumpeter described the process of constant innovation. It is the unpredictability and near-anarchy of American creativity that seems to be our niche, our fate and our best hope.

Bill Gates, Michael Bloomberg, Larry Ellison, Michael Dell and scores of other entrepreneurs owe their power, celebrity and great wealth to businesses they created from scratch.

Of course, no one knows how to educate people for this task, or create programs to foster such an environment. It’s our willful and native anti-authoritarianism, our disrespect for tradition, that is perhaps our best contribution to the world, both economically and culturally.

Once again, this time from an Asian vantage point, the real struggle of the 21st century becomes clearer: an epic conflict between institutions of order and authority versus the creativity and freedom of individuals.

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Gary Chapman is director of the 21st Century Project at the University of Texas at Austin. He can be reached at gary.chapman@mail.utexas.edu. Recent Digital Nation columns are available at http://161.35.110.226/dnation.

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