The (Ex) Washington Realist

I've been pondering Foreign Secretary Miliband's notion of the UK seeking to project influence by being a "global hub."

The UK has major advantages--stability, infrastructure and trustworthy institutions, that encourage people to do business and to form meaningful interconnections. The UK benefits from hosting these transactions and extends its global reach as a result. There is also a "soft power" possibility--that people return from the UK and are more inclined to pursue reforms.

But the flip side is that there is competition among several hubs for business. As we've seen, places that want to be global hubs also have to accept the limits of their ability to force outsiders to conform to their preferences. London has benefitted immensely from business that left New York because foreigners did not want to accept the extension of Sarbanes-Oxley standards to their operations. Britain's freedom of action vis-a-vis Russia, for instance, is also conditioned on Britain's desire to continue to be a major hub for Russia's entry into the world of international capital.

It also got me thinking about the possibility for ongoing progression. That is, the possibility that places like Hong Kong or Dubai are "Anglo/Western" enough to have the benefits people associate with doing business in New York or London, but without some of the strings. As business migrated from New York to London as a global hub to avoid U.S. regulation, will business migrate further east?