Scotsman "ultra bullish" about his adopted home (hktdc.com)


	CLSA Chief Economist Dr Jim Walker says there is no better place to be than Hong Kong at the moment

Dr Jim Walker, Chief Economist of investment brokerage firm CLSA, was voted the number one Best Regional Economist in the Asiamoney stockbrokers poll for 11 consecutive years from 1993 to 2004. He successfully predicted the Asian Financial Crisis but said he felt really bad that he got something so painful right. Dr Walker calls Hong Kong home and says it's a great place to live in.

"Nobody took notice of my prediction about the 1997 Asian financial crisis as the Asia Pacific region was used to success for so many years, and many people thought it would last forever. I guess I was stubborn and stuck to my guns. I tend to be different from consensus purely because I follow a different school of economics from the mainstream. I am glad my analysis was right but certainly not glad that a lot of lives were ruined. It was a painful lesson for everybody including some arrogant governments.

I came to Hong Kong in 1990 - my first move East -- after spending many years in academia in Glasgow and then as a bank economist with the Royal Bank of Scotland in Edinburgh. I moved to Singapore in 1995 and then back to Edinburgh for four years from 1998. We decided to relocate back to Asia in 2002. The only place we were interested in moving back to was Hong Kong.

Ideal position

Hong Kong is in an extremely good position in the region especially in relation to China. Hong Kong emerged from the Asian financial crisis much stronger and there is no better place to be than here at the moment. Hong Kong is at the centre of the equity market in China and big mainland companies need to be here to access international markets. This will be the case for many years to come as Hong Kong's financial system architecture is so much more developed than any alternative mainland cities.

This will force global companies doing business with China and vice versa to have a presence in Hong Kong. That is why Hong Kong's position in the region as a financial centre is second to none and better than ever. The city will remain this way and even though there will be cyclical bumps on the road, Hong Kong will be resilient. I am ultra bullish about the city and that is the reason why I am here.

In more than a decade here, I have seen many ups and downs. Obviously, the downs are the Asian financial crisis followed by five years of deflation with the tech bubble burst in the middle. Then came Sars in early 2003, when people were really negative about Hong Kong's future. However, I was not (negative) despite the fact that I am a Scot and Scots tend to be pessimistic - something to do with the weather back home I think - so I bought a house in Shouson Hill. It turned out to be the best investment I have ever made although I realised the gains a few months ago. I now own a house in Clearwater Bay.

HK resilience

The highpoint for me was watching Hong Kong bounce back from Sars and deflation when confidence came back with a vengeance, especially with regards to China. From now on, Hong Kong will just get better, at least for the next 10 years. I remember in early 2003 forecasting that Hong Kong would grow at a rate of 8 per cent in 2004 and everybody laughed including the government. The eventual figure was 8.6 per cent. My colleagues and I broke open the champagne after that one.

The biggest lesson learnt from the ups and downs is that one shouldn't get carried away by euphoria. You have to see economic cycles for what they are: according to the one enduring law of economic gravity, bubbles will burst and the only question is when. At this point, I am bearish about global monetary conditions as there is so much liquidity sloshing around in the global economy distorting prices and making people complacent. I am optimistic about growth in the long term, like 3-10 years and less so over the next two years which will be difficult.

What I like best about Hong Kong are the people. The Cantonese are straightforward and in my view, very similar to the Scots - they see things in black and white. They may not always be right but you know where you stand with Hong Kong people.

Well connected

I don't understand the criticism about the education system and people complaining about the decline in English skills. I think both are as good as anywhere else in the region. I think it is a shame that most Westerners living here don't bother to learn Cantonese. I speak a little but don't get enough practice.

Hong Kong is certainly an easy place to live as the transport and communication links with the rest of the world are so good. Even in commuting, it takes me just 25 minutes to get from my house in the New Territories to the office in Central. As a student, I used to walk two miles every day to the nearest train station to travel to university in Glasgow.

My family regards Hong Kong as our home now. It is a fascinating place, close to China and the Asia Pacific countries. It is a well connected hub and for me there is no better place than this vibrant financial centre. Sure, it is an expensive city but no more so than any other major world city."