Hong Kong is China’s biggest economic success – and the mainland needs it more than ever

Hong Kong is wealthier than Germany, France and the UK. It can show China how to avoid its biggest economic challenge: the middle-income trap

If the riots in Hong Kong are troubling to the world, as they jolly well should be, they are even more troubling to China.

Hong Kong is tiny, with 7.5 million people, but has been stunningly successful. It is China’s second richest city in terms of income per head, with only the gambling hub of Macau (also a former colony) a bit ahead. Its nominal GDP of $50,000 (£40,000) per capita means that it is wealthier than Germany, France and the UK.

But that is just the start. The success of Hong Kong was the beacon inspiring Deng Xiaoping to reform China’s economic system. Those reforms, from 1978 onwards, have set the country on its march to become the world’s largest economy within the next decade. In 1980 the special economic zone of Shenzhen, just across from Hong Kong, was the first such experiment. It has transformed a collection of fishing villages into a metropolis that is now larger than Hong Kong itself. The model was then extended to other special zones, which in turn formed the basis for other reforms throughout mainland China.