I’m currently sitting in the bar downstairs from my apartment, ready to write the final blog documenting my internship here in Hong Kong. I still can’t believe it’s been just six short weeks since I sat down in this very same bar to pen my very first blog about my experiences here.

During this time I have learnt so much in my adopted city-state home. The Lion Rock Institute provided me with the opportunity to experience economics in action. I learnt that economic principles are only as good as your ability to sell them to the public, a public who has never taken a micro-economics course, has never heard of the term subsidy and cannot grasp the concept of competition.  I was taught how to craft and present this message to that public. The think-tank taught me how to present a message through focusing on the victim, the person who will be harmed by the failure to adhere to the correct economic policy, and thus convince the public to adopt your point of view. I learnt that at an economic think-tank you are not attempting to sell your ideas to the atheist, the person who has already formed the opposite opinion to you, but rather you are preaching to the agnostic. You must always pitch your ideas to the undecided vote, the member of the public who does not know what to think of an economic policy, these people are seeking information, they are seeking your point of view. These skills have been invaluable to me and I cannot thank the Lion Rock team enough for their support and teaching during my internship.

However I believe the most important thing I learnt from studying the Hong Kong economy is that freedom is not an enduring and impenetrable quality. Hong Kong is currently experiencing this risk at the moment. While the former British colony is still ranked the most free in the world, the Hong Kong government has been steadily destabilising this freedom since the handover to communist China. Although I believe that this problem is not confined to Hong Kong alone and other governments around the world are experiencing this slow cooked servitude. While governments no longer lose their freedom overnight with the advent of revolution, the risk of authoritarian government is no less possible. Ronald Regan once said that ‘freedom is never more than one generation away from extinction’ and that statement seems more relevant now than ever.  

Economic freedom in a modern western society is not instantly destabilised, it is slowly waned away, one piece of legislation at a time, and I have experienced this concept during my stay here. This is the reason why think-tanks such as Lion Rock are so integral to a modern democracy, because the public is never aware of the changes to their economic freedom until it is too late, until the prosperity and freedom they once experienced has been taken away. The Lion Rock’s mission is to ensure that the citizens of Hong Kong realise the prosperity that the free-market has given them, and of the consequences of taking that freedom away.

And what can I say of my six weeks here with the Lion Rock Institute? That I have enjoyed the experience immensely, what I have learnt about economics here I could not have found in any website or textbook.  I have had experiences here I could not look up in any Lonely planet or National geographic magazine and I have found a place that for six short weeks, I could call home. I now think of Hong Kong as one of the best cities in the world, from its politics to its nightlife, the people seem to carry with them a vibrant rich culture, which in my past two months living here I seem to have barely scratched it’s surface. I have thoroughly enjoyed my internship and would recommend the experience to any student interested in an east-meets west culture and a desire to experience economics in practice. I’d like to thank the whole Lion Rock team for being so supportive during my stay here, as well Ron Manners and Mannkal for organising such a great internship. 

Work at Lion Rock was relatively light this week. Due to the News Years holiday I only had a three day left in the week. However this was more than enough time for me to get back work at Lion Rock. On Thursday myself and the other interns heard a lecture by Lion Rock co-founder Andrew Sheun on how shorting the Japanese Yen against the green-back will be the trade of the year. Andrew explained that due to the election of a new prime minister in Japan, the bank of Japan will begin quantitative easing, the result will be an inflation of the Japanese Yen, as a result, an investor should short the Yen and buy the American dollar.

I’ve also been working on my speech for the legislative council next week on education. My speech will centre around the concept of government subsidy and whether it is justified for post-secondary education. In this speech, I will draw comparisons between the education sector and other sectors that rely on subsidy to survive. My view is that while subsidy should be provided to help educational institutions survive, this should not create a culture of welfare dependency with the education sector. The speech has allowed me to do greater research into how other educational systems operate, which in turn has made me come to appreciate how well our education system is governed in Australia.

Happy New Year In Hong Kong

Sense, this Christmas decoration makes none!

Still, its business as usual at Lion Rock with the team keeping me busy with lots of great economic issues to tackle. When I return from the Christmas break I’ll be speaking at the Legislative Council on the issue of private education funding, and whether the Hong Kong government should provide property grants for student quarters. As a result, most of my week has involved reading newspaper articles and keeping up to date with Hong Kong’s property market (might come in handy later on!).

A Privately run wet-market

However, I did get the chance to venture out of the office this week on a mission for Lion Rock. One of my colleagues is researching the difference between private and government run food markets (also known as wet-markets) in Hong Kong. This meant I was dispatched to various markets around Hong Kong and Kowloon to document the comparison. What I found was I stark difference between the government and privately run markets. The public markets were all but run down, providing little in the way of hygiene or quality for its customers or its owners. In contrast, the privately run markets were of an exemplary condition and worlds apart from its government run counterpart. This is yet another example of how government run programs fail to compete with their privately run rivals. This excursion also allowed me to finally venture across the bay to the mainland peninsula of Kowloon.

Kowloon ferries, because the underground trains don't come with this view.

Kowloon is very different to Hong Kong Island; it still retains that uniquely Asian feel to it, there is a greater feeling of Chinese culture as opposed to the business-centric Hong Kong and I had  a great time exploring the area in search of an authentic Asian wet market.

Next week I will be leaving Hong Kong for a holiday and will certainly miss the city over the Christmas break. My next blog will be in 2 weeks time when I return to Hong Kong after Christmas, (but luckily in time for the New Years Celebrations!). I hope you all have a safe and free Christmas and an economically liberal new year!

Conrad Karageorge

On Tuesday I was lucky enough to be given an opportunity to speak at Hong Kong’s legislative council. The Legislative Council, or LegCo as it’s commonly referred to by Hong Kongers is essentially Hong Kong’s parliament; it creates and amends legislation as well as holds committee meetings to debate whether or not certain issues should be legislated on. I was asked by Lion Rock to give a short speech at a committee meeting on  whether or not a poverty line should be implemented in Hong Kong.

Essentially there are two kinds of poverty lines that a government can recognise, a relative poverty line based on median income, and an absolute poverty line based on basic necessities. After speaking with some of my Lion Rock colleagues, weighing up the pros and cons of both methods, I decided that Hong Kong should not implement a poverty at all, however if such a system were to be put in place, it should be an absolute poverty line, as it does more to help those truly in need. Speaking at LegCo was a very generous opportunity for Lion Rock to give me as few interns are given the opportunity.

However, I almost missed the opportunity entirely. I was delayed with other matters at Lion Rock and I only had 5 minutes to get across town to the Legislative Council building in Causeway Bay. As a result, the other interns and I sprinted from our office in Sheung Wan, jumped into the first cab we found and raced off to LegCo. Luckily I made it to the committee meeting with mere minutes to spare and was able to deliver my speech.

Later on this week, the interns and I were given the chance to have dinner at the prestigious Hong Kong Jockey Club at the Happy Valley race course. Luckily Andrew Shuen, co-founder of the Lion Rock Institute, is a member of the  club and was able to get a table in the owners room for dinner. This was one of the few occasions since coming to Hong Kong that I’ve had a chance to indulge in some authentic Chinese cuisine. I let the other interns (both of whom are Chinese) pick the meals for me. While I was a little apprehensive at first, I ended up loving all the food and I’m much  more confident going for Chinese food during my  lunch break next week.  After dinner we were able to go down to the paddock and talk with some of the owners and watch a few races. Unfortunately this didn’t help my luck, but I certainly had a good time all the  same.

Next week I’ll be preparing for another LegCo visit on private education, so stay tuned.

So let’s get down to brass tax, why am I here? As a Mannkal Intern, my role for the next six weeks is to promote free market ideas while working at the Lion Rock Institute, one of the largest think tanks in Hong Kong. Now, I imagine you’re thinking, that’s a pretty easy job in Hong Kong, in fact only recently the Heritage Foundation named Hong Kong the world’s freest economic city. I thought so too, I remember reading that Milton Friedman once said of the city-state “If you want to see capitalism in action, go to Hong Kong”.  How wrong I was. As my new boss Simon Lee said, “Hong Kong is free, it isn’t just behind the curve, and if you look at Hong Kong’s economy now, compared to its economy prior to the handover you’ll begin to notice China’s communist influence seeping through”. I’ve only been here a week and there’s regulatory issues popping up all over the place; public housing schemes, poverty line regulations and the Chinese influence in Macau. As a result, I will be kept very busy over the next 6 weeks attempting to advocate for the continued ‘freedom’ in Hong Kong.

My first week at Lion Rock was filled with all manner of discussions on a variety of issues from the concept of fiat money to the strange and amusing personalities of the members of Hong Kong’s Legislative Council. The team here at Lion Rock are mostly journalists who have strong backgrounds in both television and radio, as a result there’s always a lot of great dialogue in the office. Most of my work so far has been helping to edit Lion Rock’s magazine Capitalism.HK, which publishes articles on various economic issues and ideas with the aim of promoting the discussion of these ideas. It’s a really cool economic magazine that’s not afraid to use humour to promote its articles. For example, Capitalism.HK’s previous cover had a picture of Salma Hayek and the tagline, “How Hayek got Inflation by the Balls”. I hope to keep this humorous tradition alive with the next issue.

Aside from work, I’ve tried to experience as much of Hong Kong as possible. So far I’ve had a night out in Wan Chai, a trip to Kowloon’s markets and done a bit of shopping in Times Square (the Hong Kong version). I hope to enjoy all that Hong Kong has to offer and I’ll make sure to keep you all posted. Luckily for me, Lion Rock’s previous intern and Mannkal export Hannah Berdal happened to be in Hong Kong on holiday and came in to meet the staff. And so on to week 2, I just wrote an article for Lion Rock on Chinese influence on government gamblers and junket operators in Macau, so don’t be surprised if week 2’s blog is written on the baccarat floor as I delve more into the issue!

Conrad.

Last Sunday, Andy took Michael, a couple of friends and me to Macau -the former Portuguese colonial settlement on the coast of China, not far from Hong Kong. Although not at all connected to my work at the Lion Rock foundation, we all left with a strong first-hand understanding of the operation of the Macaunese economy. Revenue consists solely of money lost and spent by tourists. It was an adventure that required a game of charades for each taxi journey. Local food (described as a Chinese-Portuguese fusion) is great and is worth a try for anybody that ventures across to the island.

My final few days in Hong Kong with the Lion Rock Foundation were enjoyed greatly and consisted of lectures from Simon about the effectiveness of different forms of communication and the challenges faced by advocates of the free market. I was lucky enough to have lunch with some of the directors of the Lion Rock Institute and also the directors of the Acton Institute (based in Grand Rapids, Michigan) on Tuesday. On Wednesday I joined Ron Manners and Bill Stacey, Chairman of the Lion Rock Foundation, for breakfast where I thanked them for the experience I’ve had over the past few weeks.

http://en.wikipedia.org/wiki/Kunshan

Ron woke me with a phone call on Friday to organise breakfast and to take a trip to Zhouzhuang, an ancient Chinese town built over leafy tunnels and canals. We took a gondola ride through the canals (the town is promoted as a kind of ‘Venice of the East’) with fellow conference members to take in the scenery.

Just as the conference started, I saw the familiar face of Wendy, a colleague from the Lion Rock Foundation. This confused me greatly. Wendy explained that herself, Jude and Michael had managed to secure a spot at the conference and would all join me in Shanghai with support from the Individual Society for Individual Liberties. It was great to have such a strong Lion Rock presence at the conference.

Ken and Li Schooland from ISIL hosted a brilliant event that I hope to attend again in the future. Many speakers presented a broad range of topics that were accessible and interesting. I particularly enjoyed listening to Doug Bandow from the Cato Institute in Washington, who spoke about the morality and ethics of capitalism. Ken Schooland’s own presentation, entitled ‘The Importance of Migration to Economic Development’ was on a topic I have often wondered about and was particularly applicable in light of what I learned in Hong Kong.

On Sunday night everybody exchanged cards and details to keep in contact and in case they could meet again. I booked a train ticket to Hangzhou, and later Xi’an to see the Terra Cotta Warriors and Hua Shan, a sacred mountain. My friends said good bye and left for their respective parts of the world.

I’ll be in contact with everyone individually but I’d like to express my gratitude to a few people for the support and opportunities they provided over the course of this trip. Firstly Simon, Andy, Bill and all of my colleagues and friends from the Lion Rock Foundation, who taught me a lot about freedom and showed me a place that I would like to visit many times again, if not live there permanently. Ken and Li Schooland and ISIL, for their tireless organisation of a brilliant conference, and their extra efforts to accommodate myself and fellow students in Shanghai – I think everybody involved got a lot out of the experience. Finally I wish to thank Ron, Felicity, Andrew and everybody at the Mannkal Foundation for their impetus, support and guidance over the course of the internship and conference. Opportunities to learn as much as I did this Winter are few and far between, and I hope to be involved with the Foundation in the future.

This week has entailed a series of lectures from Simon Lee from the Lion Rock institute. Covering a broad range of topics, Simon discussed communication and provided a history of Hong Kong that even some of the local interns were not aware of. Simon has a wealth of knowledge on the subject and writes almost daily – unfortunately my inability to understand Cantonese precludes me from reading his column. Most of the time I am the only person in the office that cannot speak Cantonese, but my colleagues always communicate in English. It is very welcoming.

I’ve continued my tourist journey around the city, accompanied by other interns and Andy, who has assumed the role of tour guide and taught me a lot. Hong Kong has one of the highest per-capita incomes in the world but how they manage to retain any of it remains a mystery to me. The shopping here is almost round-the-clock (in fact it is for most goods) with prices and quality superior to that of back home. I’m starting to budget more thoughtfully so I’ll be able to eat in China.

A fellow intern, Jude, took me to Sai Kung. This is a fishing village with a bustling market, a fascinating scene where people will lean over the pier railing and buy seafood directly from the boats to bypass the shopfronts. The small boats pictured act as an intermediary between the village and the larger fishing boats at sea.

I hiked with Jude around an island, maybe twenty minutes from Sai Kung. This quiet park provides a counterpoint to the pace of the crowded Hong Kong Island. We travelled there on a small, open boat and were met by an intense storm at the halfway point. I enjoyed the ride but Jude had less confidence in the durability of the vessel. Thankfully the storm didn’t make it to the island with us.

Over the weekend I also visited Ocean Park with some friends, having been promised “a better version of Disneyland”. Contrary to all advice given before I left Australia, I went on a Saturday in the heat of Summer and spent a lot of the day fighting crowds. My friends bought ‘discounted’ tickets from a shady-looking man out the front, before I could warn them that it was clearly a scam. The tickets were fine and we avoided the 90 minute queue… I refrained from providing any more helpful advice for the rest of the day.

The view from the cable cars was a highlight, as was the “Sea Lion Fun Time Show”. The city paper this week compared local MPs to the dancing sea lions, an amusing sign of a healthy free press.

I had dinner on Tuesday with a friend from Hong Kong that attends my university. The restaurant had been around for over a hundred years and served many traditional Chinese dishes, including some now considered too labour-intensive for production anywhere else in Hong Kong.

Yesterday James Lawson (a former Lion Rock Institute intern) gave a talk over lunch on the European austerity measures, and the British political climate more generally. This was very interesting and James joined a few of us for a drink afterward. Michael , who has also just joined the Lion Rock Institute, is an intern from the Hayek Institute in Austria. There is now no shortage of fellow first-time visitors to explore Hong Kong with.
Something I found interesting was the (albeit limited) ability of private banks (HSBC, Standard Chartered Bank and the Bank of China) to issue banknotes for the Hong Kong dollar. These notes are redeemable for an agreed quantity of US Dollars. Although fiat money in a technical sense (the reserve currency is itself fiat money) this demonstrates the possibility of a currency deriving value from a tangible good.

Housing is a well-known challenge that the city faces because of its large population and unique geographical characteristics. Ron Manners sent through this link which shows the innovation that has developed in light of these constraints. Australians seem to have a strong aversion to living in close proximity but perhaps further development in this field could persuade them otherwise. If I have the time this week, I may investigate this topic further.

https://plus.google.com/103389452828130864950/posts/8MknTPBH9X7

Tom, a local Lion Rock Institute intern, has given me a map book of Hong Kong. I look forward to exploring a little more of the region (and possibly Macau) before heading to Shanghai on Thursday!

I was thrown in the deep end at the beginning of my Hong Kong experience – the MTR took me from Hong Kong International Airport to Central, one of the most significant commercial and financial centres in the world. A taxi ride from there to Shuen Wan took an abnormally long time because the streets were packed full of people returning from the Handover Day Anniversary fireworks.

I had Monday off, which proved lucky as I hadn’t managed much sleep on the way over. I sorted out my hotel and familiarised myself with the Central district, and journeyed up to the Peak.  I met a number of other tourists on the way, and shared lunch with two of them. I accepted their offer to show me around, including taking the iconic ferry across Victoria Harbour, and dinner and a drink in Tsim Sha Sui.

The restaurant in Tsim Sha Sui was Szechuan Chinese food. The waitress and my friend conversed (“She says that you are Australian, you must order the ‘baby-spicy’ dish”) in Cantonese. I insisted that I order what everybody else had, and later regretted my decision. A friend found a bottle of water for me as the menu had no pictures, let alone an English translation.

My first day at the Lion Rock Institute was enjoyable. I met my colleagues and was introduced to the working of Hong Kong government, as well as their political and commercial framework. Hong Kong’s legislature has a ‘Liberal Party’ as well, apparently. An advertised policy is “Taking Action against the Peak Dog Poisoner”, providing a stark contrast to Australia, where the democratically elected parties (are supposed to) wrestle with significant national issues. Hong Kong’s major decisions are made by a quasi-democratic executive body.

Eating out is a much bigger part of life here than back home. All the food thus far has been excellent, but a highlight was dim sum at the Michelin-Star branded Tim Ho Wan. For one of the best meals I have ever eaten (and a portion size so much that I struggled to walk back to the office) the cost, I calculated, was $8.61AUD per person. Tripadvisor lists ratings for 3350 different restaurants in Hong Kong; the original Tim Ho Wan ranks an impressive 12th. Hong Kong’s immigration, training and regulatory environment (or lack thereof) means that people are able to learn to cook, procure inputs and open a business at minimal cost and without undue government interference. It will not surprise those from Mannkal that this setup leads to massive competition and excellent food for millions on the relatively tiny land mass. I would encourage all to try to experience the system in practice.

An interesting article from The Economist on the topic, and more broadly, Hong Kong’s path toward a more regulated state, can be found here.

http://www.economist.com/node/16591088

The often-cited exception to Hong Kong’s free-market inclinations is the large percentage of the population in housing subsidised by the government. Lion Rock has highlighted that this has led many youths to devoting themselves solely to seeking a free house from the government instead of engaging in productive enterprise. The institute is preparing for a campaign that will encourage both rent-seekers and the Hong Kong government to abandon this deadweight loss to the economy.

http://us1.campaign-archive1.com/?u=33c46a379d7feff7c125977c1&id=0294432041

I’ve been lucky to see some of the nightlife here as well – tonight I will head to Lan Kwai Fong. During the week I also visited the Hong Kong Jockey Club with my colleagues from Lion Rock, and had a great night. Everybody here is friendly and insists on showing me around.  Three weeks will not be enough to fully experience this brilliant city.

Bustling trams in Sheung Wan

As the lunar year reaches a close, the Lion Rock office has been busy as they prepare for the launch of the first issue of Capitalism.HK as well as participating in several interviews and columns that have gained significant media coverage – especially considering the Heritage Foundation renamed Hong Kong as the worlds freest economy for the 18^th consecutive year the week before. The issue that has become increasingly debated among newspapers and news media this week has centered largely around the pleas from pork sellers in wet markets (the traditional marketplace for a series of small retailers) for the government to intervene in order to stop supermarkets discounting pork to price small retailers out of the market. This has caused a huge stir as supermarkets have only 30% market share in pork and wet market sellers are notorious among consumers for having dissatisfying practices and prices. This has led the Institute to publish a large ad in the local Hong Kong newspapers and press which helps consumers understand the ramifications of protecting inefficient enterprise – something that has been extremely successful in helping the average pork buyer understand that they are the real victims should the price changes of pork (a natural effect of demand/supply changes) be artificially pushed upwards to ‘protect’ pork retailers.

Outside the office lobby before Chinese New Year

I have also had the chance to work on an article for the South China Morning Post surrounding the Ho Tung Gardens heritage debate (last year’s Mannkal intern Lazar had written about the problems of heritage conservation and unfortunately, not much has changed since!) with 70-year-old Ho Min Kwan fighting to save the rights to her own property as she is faced with the huge costs of maintaining a decrepit building worth millions of dollars in land value, or being forced to ‘land swap’ her family home on the Peak with another piece of land owned by the government. This has been an extremely contentious issue and I hope the government moves to correct the scheme following the Chief Executive elections later this year.

On my last day at the office I was fortunate enough to have traditional dim sum in Causeway Bay with some colleagues of the Institute, which was a great way to end this amazing internship as well as learn about some of the food Hong Kong is so famous for! The shanghai pork dumplings, pork buns and sago filled desserts (an interesting mix of small rounded jelly-like balls, coconut milk and sometimes corn or fruit) are surprisingly delicious and will be greatly missed on my return to Australia. 

Enjoying Chinese cuisine in Sheung Wan

I would like to extend my greatest thanks to everyone at the Lion Rock Institute who has taken so much of their own time to help me learn and cultivate my passion for the free market. The enthusiasm and passion of the Institute has helped me in so many ways and has been a constant source of inspiration. I would also like to thank Mannkal as well as Ron Manners for giving me the opportunity to embark on such a life changing experience that has helped me enormously in understanding the challenges faced by modern libertarians as well as the roots of Austrian economics and the legacy they leave to us today.  I hope to continue to fight for liberty and freedom back home in Australia, and will never forget the time I spent being a freedom fighter in the greatest, and freest, economy in the world. 

View from my desk at the Lion Rock Institute

Beautiful Parkland at Tsim Sha Tsui

At Lion Rock I have been busy finalizing my piece on Competition Law and continued to learn a lot about the political environment here as the city leads up to the Chief Executive elections. The topic that has gained particular coverage has been the calls to put a ‘price’ on waste by implementing a levy on all Hong Kong households and businesses depending on how much waste they produce (through a variety of proposed methods). This has been causing a stir amongst the public, particularly those already struggling with the rising costs of living and uncertainty surrounding the current business and economic environment. As many countries around the world begin to adopt these types of environmentally conscious plans, it will be interesting to see if Hong Kong follows a similar path.

Celebrating Mr Potato Head's 60th Anniversary in China

This week also saw the Heritage Foundation announce it’s annual Economic Freedom Index for 2012, with Hong Kong retaining the top place for the 18^th year running. While this is a great thing for the city state as it has seemingly managed to maintain its non-interventionist roots, the Institute has been quick to remind me that the freedom the Hong Kong economy has is continuing to dwindle and it is only when compared to countries that have increased government regulation as a way to ‘fight’ the global downturn (and therefore restricting certain freedoms), that Hong Kong is able to maintain its top ranking.

Chinese New Year Decorations at Times Square

On the weekend I had the chance to explore a bit more of the Island, travelling on the MTR to both Causeway Bay and Admiralty. With Chinese New Year approaching, the streets were filled with thousands of locals buying presents and food for their family and it was amazing to see, and after braving the infamous department store SOGO (known for its very tempting sales and enormous selection of items) I now understand why Hong Kong is one of the greatest shopping destinations in Asia – they take their shopping very seriously! I look forward to continuing to learn more about Hong Kong and will hopefully try and fit in as much sightseeing as possible as I finish my stay.