Friday, June 08, 2007

FDI and Judiciary Independence

Wu Bangguo, head of National People's Congress (China's legislature) made a few remarks on the relationship between the central government and HK Special Administrative Region the other day. See this story here.

Former Chief Secretary for Administration Anson Chan warned that if the central goverment and the HK government are not going to come out to clarify whether Wu's remarks imply that Beijing is having a rethink on HK's judiciary independence, this might have adversely affect investors' confidence HK. Read more here.

If I understand Anson's logic correctly, she is trying to argue that investors would likely leave HK or at least not increase their investments here if we don't have judiciary independence any more.


If that were true, you would expect say democratic India to have far more FDI than say our motherland China then. The reality is that, China, a place where judiciary independence is at best a work in progress, is a FDI magnet and China's FDI flows dwarf those of India's. See the relevant charts here.

1 comment:

Kempton said...

Thanks for tagging entries with "Stupid Politician", I found this older amusing entry because of it.

Now, I think your India and China comparison is a nice try but rather complicated the matter.

I suspect another way of looking at the issue is putting the focus on Hong Kong itself alone. One may argue that there may be a drop of FDI in Hong Kong if Hong Kong has less judiciary independence.