Whatever Next?

I previously wrote that after the Economist event in Hong Kong entitled "The World In 2011" that I would share some of the thoughts I had expressed that night, because some people asked me about them - and in any case, I don't expect them to actually be published - except perhaps the last, which is a little controversial.

First an apology. More of a disclosure really. These are very largely about Hong Kong, so if you're not interested in Hong Kong, scroll down to the end for the final "prediction". 

The Economist suggested I might like to give consideration to making "a prediction", which to me meant one item. But really - if I made only one prediction I might get it wrong unless it was so glaringly obviously going to happen - and so I cheated a little - I made five. And they weren't all totally serious.

Mind you, I didn't cheat as much as Regina Ip with whom I was sharing part of the platform. She predicted that in 2011 Hong Kong would have a new political party - and two minutes later told us all she was starting a new political party in 2011! Hmm. Inside knowledge perhaps?

Anyway I started off with a disclaimer about making predictions - especially about the future! Too many people have gone down that path only to find themselves being seriously embarrassed later, and I have no wish to join them. But then, throwing all caution to the wind, off I went with a bit about currencies.

It is my prediction that in 2011 the renminbi will not be significantly revalued. It is, nevertheless my hope that at least a few politicians from outside the region (C'mon, if I said America you would accuse me of bias), would understand that the louder they demand a revaluation of the currency the lower the chances of it actually happening. I am sure that China understands the currency issue as well as, if not better than, most and they do hold rather a lot of US$ denominated paper, but there is NO WAY they are going to leave themselves open to jubilation by others who want to say "we forced China to revalue". It's not going to happen that way!

Sticking with the currency theme I moved along to the HKD peg - which some organisations and people have been suggesting is outdated and should be scrapped - sooner rather than later. Their reasons?  A falling greenback, a renminbi rising (at least in usage) and suggestions that external forces and money are contributing to a Hong Kong property bubble.  My prediction? Not in 2011. After all, do you really think there is anyone in the Hong Kong Government or the HKMA who wants to be known as the person who pulled the plug on the peg?

Moving swiftly on, but staying with the Hong Kong Government, those familiar with Hong Kong will be aware that the brand new Government Offices will be complete in 2011. In a prime piece of real estate on the waterfront. I felt compelled to predict that in 2011 land reclamation along the Central waterfront, a constant feature of our lives in recent years, would cease forever. Once again, a simple reason - no one in Government would wish to spoil their view of the harbour!

Now for Hong Kong a more serious prediction. I think it is perfectly possible that in either March or September 2011, with the publication of the Global Financial Centres Index issue 9 or 10, that Hong Kong will overtake both New York and London in the rankings.

Now, before you start sniggering think about this. Hong Kong is already only 10 points behind New York, and 12 behind London and is gaining in reputation largely due to its strengthening position as a renminbi settlement centre. Meanwhile, New York is still trying to shake off its financial hangover and London - as a result of some possibly short-sighted new tax policies - is losing ground. It is going to happen, folks, and you know what?  No one is likely to be more surprised than Hong Kong! But when it happens Hong Kong, for goodness sake make a noise about it. (A positive one!)

I chucked in a comment about the proposed Singapore and Australian stock exchange merger - which I don't think will happen, and then moved to my final prediction.

IF YOU HAVE SCROLLED DOWN THE PAGE LOOKING FOR THE LAST WORD - IT'S HERE!

My prediction relates to North Korea.

I expect the displays of North Korean aggression to increase over the following months as an ailing Kim Jong Il struggles to get his youngest son, Kim Jong Un accepted as the next leader. Something that seems to be a more difficult task than he had hoped. Perhaps some people in North Korea are unconvinced that the undereducated newest general is quite up to the task.

But my prediction is that in 2011 the "Dear Leader" will become the "Dearly Departed Leader" . The chances of the junior Kim becoming the "Dear Successor" are initially high - but there will be a subsequent and very unseemly power struggle, the outcome of which will have severe and significant repercussions for South Korea and China in particular - but will also have a major impact globally.

From my very personal perspective - and there will be many differing views - the best solution is a Hong Kong/China system for the Koreas; One Country - Two Systems. That was not in my predictions, but then everything surrounding the Koreas and a resolution to the current problems requires a whole different forum.

That was it! Five predictions - made in the hope that I get at least one of them right.

I have now, as predicted, arrived in England to spend the holiday season with the indefatigable Mary, to discover that Britain has again been surprised by the fact that winter has arrived! It looks pretty today, but it will be slush soon - and a white Christmas. Who knows - I'm certainly not going to predict that!! 

Comments

[Helen Tsui]

Dear Mr Eldon,

May be one more prediction for HK - asset bubbles will be continued in 2011 and the government is short of any effective measures to ease the situation?

Just to let you know that I enjoy reading your blog and appreciate your generosity to share personal insights and experience through your postings. Wish you and your family a Happy New Year in England.

Warm regards,

Helen Tsui

[Robert]

Your 'predicted' arrival in England was certainly well timed. Just made it I suspect! White Christmas looks like a certainty! Trying to predict whether you'll get out of England as predicted might be a different matter! Best Wishes for Christmas & New Year to you all.

[wzwz13]

Mr Eldon..prediction number six is the USD will strengthen against major currencies. Why?..my six sense say so:) have a bless christmas and a healthy 2011 to you and your family....