A slew of bad news hit Hong Kong recently. On the financial side, downgrades of the Hong Kong Special Administrative Region's credit rating and ranking as an international financial center followed in quick succession. The real economy is faring no better because both visitor arrivals and retail sales registered sharp declines in the first two months of this year. Businesses fear that the decline is not cyclical but part of a secular downturn arising from Hong Kong's loss of competitiveness across many sectors.

Those who care about Hong Kong and have been watching closely will not be surprised. Last year, the Urban Competitiveness Report published by the Chinese Academy of Social Sciences found, for the first time, that Hong Kong's overall competitiveness had been overtaken by Shenzhen. Even more significantly, back in mid-2013, Strategic Forecast, a US-based global intelligence company, had warned of the SAR's "declining economic fortunes" arising from its "growing antagonism toward surging mainland cultural and economic influence into Hong Kong".

As an age-old Chinese adage goes, an outside view sometimes provides greater insight into one's predicament. The Strategic Forecast said: "Hong Kong is experiencing an identity crisis." The SAR's growing discomfort over the mainland's growing influence had prompted "a tide of 'nativism' that could make Hong Kong less appealing to outside businesses just as other cities are poised to seize investment opportunities". It also warned: "If it (Hong Kong) is to keep its competitive edge, it is going to have to abandon the complacency born out of its advantaged position and start seeking new opportunities for growth."