FREE: JOIN 100,000+ READERS   

≡ Menu
SOVEREIGN MAN

Which countries will compete for you

March 24, 2010
Hong Kong, SAR

One of the worst things that can happen to a country is to experience a brain-drain.  The loss of productive people who create new technologies and companies means the loss of the jobs and wealth that they create.

The long-term aggregate effects of this can be truly devastating, and history provides no shortage of examples.

By nature, though, people are generally creatures of habit– inert beings. They must be acted upon by a tremendous force to uproot them and get them moving… but everyone has a breaking point.

In aging superpowers, governments seem to be doing all they can to exert enough force to push people beyond their breaking points.

I have seen, from my own vantage point, a flood of new, fed up expats arriving to places like Hong Kong where the jobs and opportunities are plentiful, and they have strong incentives to be productive.

In fact, though it doesn’t have the same songs and bombastic statement as other countries who think they have the lock on ‘freedom,’ Hong Kong is one of the most economically free places in the entire world.  The level playing field ensures that everyone has a chance to succeed.

Do you remember how the world thought that Hong Kong was going to turn into yet another communist graveyard when it reverted to Chinese authority in 1997?

The exact opposite happened. Rather than force Hong Kong under its totalitarian authority, mainland China learned from the island’s success and adopted increasingly free market policies.

Hong Kong shows how far free market policies can go in transforming an entire society; 100-years ago, it was just a rock, devoid of any natural resources, and populated by largely illiterate fishermen.  Only decades later, the island had risen to prominence as a global financial center.

How did this happen? By allowing businesses to freely compete with each other for consumer dollars, and by attracting the best and brightest minds across the entire world to come and become wealthy from their hard work and ingenuity.

Essentially, this is the concept of “America” that has worked so many times in the past.

Today, Hong Kong has matured, along with the rest of Asia.   It is no longer the only free-wheeling boomtown of the “wild, wild east,” and the island now finds itself competing for financial primacy with the likes of Singapore, Tokyo, Shanghai, and even Labuan.

This competition is good, though, and I think it’s a sign of things to come.

Smaller jurisdictions, particularly those which lack cash cow natural resources, will continue to compete with each other to attract the most productive people through ultra-low taxes, residency/citizenship incentives, and top quality standard of living.

The theme is simple– “If you are bright and motivated, we want you to live here; and, because your ideas and hard work will make this a better place for everyone, we’ll let you keep most of what you earn and enjoy the fruits of your success.”

In aging superpowers, it goes something like this– “If you are bright and motivated, we expect you to provide for everyone else. You should be happy to do this because it is your patriotic duty, in our sole opinion. There will be consequences if you fail to comply.”

Large, debt-ridden nations will likely continue down their path of self-destruction.  I fully expect smaller countries, however, to choose a different direction and join the competition to attract the intellectual and financial capital of productive people.

This is good news for the productive who will find that they have increasing options for residence, better lifestyle, and the accumulation of wealth.

I’m seeing the signs of this already– for example, there is a very interesting new business and employment incentive program in Chile that I’ll be discussing soon, and a variety of new measures to boost entrepreneurship in countries as diverse as Guatemala, Cambodia, and Lithuania.

In the meantime, if you find yourself in the ‘fed up’ category, I’d strongly encourage you to look in places like Hong Kong for new beginnings… obtaining residency is a straightforward process, and within the island’s strong economy is a multitude of jobs and business opportunities

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

Want more stuff like this?

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens. Click below to join our community of 100,000+ sovereign individuals.

Click here to receive our free intelligence

Comments on this entry are closed.

  • Eric

    Hey Simon,

    I love a lot of the stuff you put together, but this line of garbage about China is ridiculous. China is in a huge spat with Google because Google has refused to continue to filter search results. China has the worst record of human rights abuses of any country on the planet. The fact that they allowed an economic engine to continue running to fund their lunacy does not excuse the fact that they have a terrible government that does terrible things. The handful of wealthy people that live on the coast mask the horror of a country that enforced a one child per family policy, devalues women, persecutes the free practice of religion, strictly controls the free flow of information, has awful corruption and the list just goes on.

    This is a country that if they had the capability, and fortunately just having the masses is not enough, would happily take over the world and feel justified in doing so. We should all be grateful that they simply do not have enough going for them to pull it off and they know it.

    Get off the China boat already.

    • desmond

      Eric-

      Good points about china’s human rights policy, but I think you are missing the boat on their economic freedoms. YES if they had the capability they would happily take over the world. so would/has/does the United States. but this doesn’t have anything to do with the way the mainland has set up economic freedoms that mirror hongkong. they can’t vote, but they can make money. for many chinese, that seems to be good enough for now, regardless of what happens with google.

      • Eric

        Economic freedom does not eradicate these kind of wrongs. I personally have known and met people who were literally locked away for decades because they passed out Bibles to friends. It isn’t simply political freedom that is restricted, it is personal freedom, such as freedom of speech, freedom of movement, freedom of religion and freedom of personal choice that is restricted. That is insane! I get annoyed at the freedoms that are being lost daily in America as well, but this is a different category of crazy.

        The US has not attempted to take over the world nor, as a country, has it attempted to make the world in its own image. We have a long track record of doing what it takes to protect our own interests but then restoring national sovereignty, ie, Germany and Japan. We try to assert our influence and have a voice, but that it simply not the same thing as being willing take control of the world. We would never just invade Canada or Mexico just to take them over.

    • Rich

      And I’d point out, in reference to China’s human rights record but by NO means condoning it, that the US’s record of human rights violations is staggering. Look at Gitmo, the secret CIA prisons and Abu Ghraib. Doesn’t make our message of human rights ring true, does it?

  • GeraldC

    Simon- right on. China may go down as the first country with an emerging middle class that cares more about economoic freedom then political freedom. No one wants to rock the boat when they have so much prosperity– they started in Shenzhen 50-years ago after watching HK, and it worked out so well they’re doing it all over the mainland now.

  • http://Na.com Steve

    Mr. Black. You and International living have been promoting Panama as a safe haven fromthis economic crisis betting on the expansion of the canal. However, with current trends of distrought shipping lines, almost forclosed on ships, threats of trade war(krugman $0.25 on china import), Is Panama still self reliant/ indepently weathly if income from the canal drops off? Is Panama too heavily invested in the construction of the expansion of canal that it might affect it’s cash flow?

  • Me

    Eric. I normally don’t comment on topics posted here that I disagree with, but am willing to make an exception. Lucky you!!

    Political freedom does absolutely NOT equate to personal freedom. A democracy is a sloppy idea of freedom at best. At worst it promotes state sanctioned theft. Theft legitimized by your fellow citizens…over 50% in the US at last count.
    To suggest that the US does not, or has not attempted to make the world in its own image flies in the face of the facts. Vietnam, Somalia, Panama, pissing of peasants I recently met growing crops in Bolivia (drugs), Afghanistan, and of course Iraq. Forgive me for missing a bunch of others.

    Additionally the reason for not invading Mexico or Canada is because you don’t pick on the big kid in the playground if you are a bully. You choose the small crippled kid with the juicy lunch pack that won’t fight back.

    You may or may not recall George (I’m the village idiot) Bush proudly stating that he was bringing Democracy to Iraq. Guess what? many of these people do not want Democracy.

    I like the Chinese government about as much as I like root canal treatment but you are totally missing the point. Singapore is no democracy while achieving one of the highest living standards in the world, financial and business freedoms only dreamt about in the developed world countries which are almost all entirely insolvent. This insolvency ensures less not more personal freedoms.

    Travel some, turn of the TV and find out what it actually happening out there. You are paying a ridiculously high price for your “political freedoms”.

    • Eric

      Lucky me indeed!

      I’m not merely referring to political freedom as a concern. I’m also referring to religious freedom, movement freedom, lifestyle freedom. I’m also referring to the incredible disparity between coastal Chinese vs. inland Chinese. Hong Kong and the seaboard of China represent a very small minority of China but most Chinese survive with an atrocious standard living.

      I’m glad that you think that China is such a great place to live. But the billion or so Chinese that live on less in a month than you spend in a typical day might beg to differ. You were blessed with the opportunities that an American upbringing gave you, opportunities that you never would have had if you had been born in China.

      Do you have a sibling? Or perhaps several? Which of you would have gotten to live if your parents were Chinese?

      I’m not saying everything China is all bad. But your elevation of China as a shining example is tragic.

  • Me

    I do not think that China is a great place to live. Some do and I have no issue with that. It doesn’t fit my personal desires but that is not what we are discussing here. What is in discussion is that planting a Flag in such a place is something worthy of consideration….or not.

    For what its worth I think the Chinese government are likely bigger crooks than in many other countries, the US included. The incredible dynamism, entrepreneurial and sheer capitalist spirit of the people combined with capital is a powerful force that has been unleashed. Now that it has been unleashed I don’t believe bottling that desire and increasing know-how is going to be held back should any government attempt it. I also do not believe that the current government is dim enough not to realise this. They have in fact promoted it.

    You mention people living on pitiful amounts. If you read through history books you’ll find that nations that have dug themselves out of poverty and risen have always experienced a wealth gap. What needs to be understood is that production and wealth creation enable greater prospects for all and not just the elite few. A wealthy country like the US boasts “poor” people who earn more than some “wealthy” people in many third world countries.

    Disparity between rich and poor, whether it be domestic or international is something that is not solved by political or religious freedoms but by freedom of trade. I guarantee you that a country like Myanmar would flourish if they opened their trade doors. Political freedoms and religious freedoms be damned.

    Lastly. Never assume anything. I am not “blessed with an American upbringing” and frankly see no relevance as where I was brought up has no bearing at all on whether or not a particular country is worthy of my consideration for business, banking, passports or lifestyle. I am not a product of any country or national ideology but rather a product of what I choose to think and do with my life. That sort of thinking is frankly humiliating.

  • ME

    This is not China proper or what is now called Mainland China. Hong Kong is a seperate part of China operating under the British rules, mainly. Only by spending time there can one see the difference in government.

Read previous post:
Banking and Gold Storage in Hong Kong

March 23, 2010 Hong Kong, SAR The banking system in Hong Kong is one of the most advanced in the...

Close