OF THE world’s three great commercial centres—New York, London and Hong Kong—two are on the defensive. London faces a rupture with the European Union, which wants to seize the City’s euro-related activities and shift them inside the currency zone. In Hong Kong the fear is of deeper assimilation by mainland China, followed by irrelevance.

Entrepots, after all, can become obsolete. Venice once teemed with merchants, not tourists. Yet while London’s problem is complacency, Hong Kong’s pessimism seems overdone. It remains vital both to China and to the country’s trading partners—the adaptor that converts the mainland’s financial and legal voltage into the one used by the rest of the world.

Today’s gloom partly reflects a fear of Chinese autocracy. During Schumpeter’s recent visit, Xi Jinping, China’s president, in town for the 20th anniversary of the resumption of mainland rule, warned that, while the constitutional structure of “one country, two...Continue reading