China's big hope is not Hong Kong
Hong Kong has played a vital role in China's economic development by providing capital and linking China to world markets. But the territory's most important function is to offer legal protection and financing to some of China's most talented entrepreneurs. This institutional function stems partly from the British colonial legacy of the rule of law. A more important reason, however, is the slowness of institutional reforms to protect and finance domestic private businesses. Consider the case of Lenovo, China's largest computer maker. After its move late last year to purchase International Business Machines' personal computer business, many hailed Lenovo as leading a new breed of world-class Chinese domestic company. The deal enhanced the view that China was fertile ground for entrepreneurial growth. McKinsey Quarterly even claimed that China had the “best of all possible models”.
These business analysts missed one detail: Lenovo is a foreign company. Lenovo organised its operations in China as subsidiaries of its Hong Kong branch. As such, they are subject to laws pertaining to foreign direct investment rather than those for domestic business. In 2003, seven of Lenovo's Hong Kong subsidiaries were among China's 500 largest foreign operations.
There is a good reason for this arrangement. While China has substantially liberalised its FDI policies, the legal and financing regime for the domestic private sector has remained highly restrictive, as shown in my book, Selling China. This forces some entrepreneurs to establish Hong Kong branches and use them to invest back in China. Lenovo was initially denied a licence in PC manufacturing until it gained the legal cover of a Hong Kong company. While its start-up capital from its Chinese parent amounted to only US$40,000, Lenovo then obtained millions of dollars in financing in Hong Kong. China's massive financial system contributed little to Lenovo's growth. Hong Kong has offered legal and financial sanctuaries to other Chinese companies: TCL, Galanz and Kelon, top home appliance makers, have substantial ties to Hong Kong. The four Chinese companies listed by Forbes in 2002 as among the world's most dynamic all have their headquarters in Hong Kong.
Understanding Hong Kong's institutional function is not a trivial issue. Good institutions and private ownership are vital for economic growth, and while China's mainland lacks good institutions, it can access them in Hong Kong. But how replicable is China's experience to other developing countries? McKinsey's exhortation of China as the “best of all possible models” is equivalent to urging other countries to have their own Hong Kong a nice suggestion but one every developing country should pay to ignore.
There is another policy implication. Amid many institutional inefficiencies, Chinese policymakers have done two things right. First, they liberalised FDI; and second, from the late 1970s they began allowing Chinese citizens to travel abroad. This new mobility enabled some entrepreneurs to escape the traps of a bad system. China's success has less to do with creating efficient institutions and more about allowing such an escape from inefficient institutions.
A deeper issue is whether this escape valve is sufficient. There is an accidental quality to the Hong Kong factor. The father of Lenovo's founder ran a Hong Kong business and his company arranged critical financing for Lenovo in the 1980s. TCL, Galanz and Kelon are a short distance from Hong Kong. But what of those entrepreneurs located in China's vast rural and interior regions, far from Hong Kong geographically and culturally? How do they get financing and legal protection without access to Hong Kong? In fact, China needs entrepreneurs in the interior regions to succeed more than those on the coast. The poverty there is greater and the possibilities more limited. Indigenous entrepreneurs can create greater value in these backward regions. That is why FDI can never be a full substitute for good legal and financial institutions.
FDI is an urban phenomenon, but in China the most dynamic entrepreneurs reside in the countryside. They created China's true miracle growth in the 1980s by increasing agricultural yield and by starting many small-scale businesses. A hospitable institutional environment to harness the countryside's entrepreneurial talents will make China more prosperous and its system more fair. Income distribution will improve and boost consumption of basic goods. In the last two years, Chinese leaders have begun to address the country's institutional gaps, including a 2004 constitutional amendment to strengthen private property rights protection. They can do far more, starting by granting peasants full ownership of the land they till. This will put China on a sustainable growth path far more than anything Hong Kong can offer.
The writer, an associate professor at MIT Sloan School of Management, is writing a book about China's domestic private sector
中国真正的希望不在香港
香港在向中国大陆提供资金的同时，还将中国大陆与世界市场对接起来，从而在中国大陆的经济发展中起到了十分关键的作用。然而，香港最重要的功能，还在于它向大陆最优秀的创业家提供了法律保障和融资渠道。香港之所以具备这一制度功能，部分是源于英国殖民统治时期遗留下来的法规体系。然而，更重要的原因在于大陆制度改革进展缓慢，私营企业的法律权益和融资渠道无法得到有效保证。中国最大的电脑制造商联想(Lenovo)就是这样一个例子。联想去年年底收购了IBM个人电脑业务后，各方对此赞誉有加，称联想正引领着中国新一代世界级本土企业的成长。这宗交易使世界更加认识到中国是块企业发展的沃土。《麦肯锡高层管理论丛》(McKinsey Quarterly)甚至声称，中国的企业发展已成为全球“最可行的模式。”
不过这些商业分析人员都忽略了这样一个细节：联想是一家境外企业。联想在大陆组建的业务分属其在香港的分公司。因此，联想的大陆业务适用于外国直接投资的相关法律，而非国内企业的法律。2003年，联想香港分公司下属的子公司中有7家进入中国最大500家外国企业名录。
联想的这种策略是很有道理的。正如我在《出售中国》(Selling China) 一书中分析的那样，尽管中国对外国直接投资的政策已经大为放宽，但针对境内民营企业的法律和融资制度仍设限太多，这就迫使部分企业在香港成立分公司，利用其在香港的分公司反过来投资在大陆的企业。联想起初未能获得个人电脑的生产许可，直到成立香港分公司并利用这一合法名义，才获准进入这个领域。联想香港分公司从大陆母公司获得的启动资金虽然只有4万美元，但在香港却获得了数百万美元的资金。相比之下，中国大陆庞大的金融体系对联想发展所起到的作用微乎其微。此外，香港还为TCL、格兰仕和科隆等其他大陆企业提供了法律和金融保护，这些顶尖家电制造商都与香港保持着极为密切的联系。这四家企业被《福布斯》杂志评为2002年全球最具活力企业，它们的总部都设在香港。
了解香港的制度功能不是件简单的事。良好的制度和私有化对经济发展极为关键。虽然中国大陆缺乏良好的制度，但香港可以提供。然而，中国经验可在多大程度上复制到其他发展中国家？麦肯锡将中国模式视为“最可行的模式”，这无异于敦促其他国家也拥有自己的“香港”，这个建议听起来不错，但对所有发展中国家而言，这又是不可行的。
在政策制订方面还有另外一层含义。在大陆体制效率不高的背景下，中国政府的决策层至少在两个方面做得很好。首先是放宽了对外国投资的限制；其次，从20世纪70年代起，中国政府允许中国公民以个人身份出境。这种政策管制的放松，给部分创业家摆脱大陆的制度限制提供了机会。中国的成功较少体现在高效率的制度建设上，倒是与政府在多大程度上允许人们摆脱控制更密切相关。
深层次的问题在于这种允许逃避的手段是否足够。香港的因素存在偶然性，这限制了其作用的发挥。联想创始人当年在香港经营一家企业，就是这家企业在上世纪80年代为联想提供了至关重要的融资支持。TCL、格兰仕和科隆在地理位置上与香港也很近。但在地理和文化上与香港比较远的广大大陆和农村地区，创业家那里的创业家又怎么办呢? 他们如何在无法借力香港的情况下获得金融和法律保护？事实上，中国应该帮助大陆创业家比沿海创业家的获得更好的发展。因为内陆地区更贫穷，成功的机会也有限。本土成长起来的创业家在这些欠发达地区会发挥更大的价值。这就是为什么外国直接投资永远无法完全取代良好的法律和金融制度的原因。
外国直接投资一般针对城市地区，但在中国，最有活力的创业家集中在农村。他们提高了农业产量，创办了很多小型企业，是他们造就了上世纪80年代中国真正的增长奇迹。良好的制度环境可以更好的驾驭中国农村地区的创业家，可以更好的促进中国经济的繁荣，提高体制的公平性。收入分配可以更加合理，以刺激基础产品的消费。在过去两年中，中国领导人已经开始着手缩小大陆在体制上的差距，这其中包括2004年修宪中有关加强私有财产保护的内容。中国领导人要做的工作还很多，比如可以开始考虑赋予农民耕地的完全所有权。这些做法能帮助中国走上可持续的发展道路，其意义要远大于香港所能提供的一切。
本文作者系美国麻省理工学院斯隆管理学院副教授，他目前正在撰写一本有关中国私有企业的书。
