Attendance at the European Central Bank’s fortnightly policy meetings tend to crimp the long-distance travel plans of Patrick Honohan, governor of the Central Bank of Ireland. Taking advantage of the annual August lull back on his home continent, on Monday Honohan was able to speak at a seminar at the Hong Kong Bankers Club and take in its views of the city’s ever changing skyline.
Across the harbour, workers are putting the final touches to the International Commerce Centre, Hong Kong’s tallest – and the world’s third tallest – building. “It’s always some [change] like that when you come to this region,” the central banker said, almost wistfully, before picking out some similarities between his country and fast-growing Asia.
Dublin’s skyline may not be a patch on Hong Kong’s, but long before a Goldman Sachs economist christened the Brics, the Celtic Tiger was an established economic phenomenon with average annual GDP growth of six per cent from 1988 to 2007.
What’s more, like modern China, it was experiencing a dramatic shift in employment away from the agriculture sector. Honohan noted that Ireland then, and Hong Kong and Singapore now, are encouraging reminders of “how rapidly a small region with a small population can grow”.
Unfortunately for the Emerald Isle, he observed, its history over recent years was more a re-enactment of the 1997-98 Asian financial crisis, with its unsustainable borrowing and a run-away property sector. “If Ireland had stopped to take stock we would have been in a much better place than we are,” he observed. “We can learn from each other’s experiences, and some of us in Europe should have learned better from the Asian financial crisis.”
Hong Kong, at least, appears determined not to repeat Ireland’s most recent mistakes. On Tuesday the government will conduct two land auctions: its most recent effort to increase supply and contain its own inflating property bubble.
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