Published: 02:14, September 30, 2024
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Hong Kong is nation’s economic catalyst
By Bill Condon

Hong Kong’s role in supporting national development has become increasingly relevant as the Chinese mainland pursues a strategy of resilience and self-reliance while strengthening its capabilities in key sectors, such as science and technology, which will enhance productivity, efficiency and sustainable development.

The city’s unique status under the “one country, two systems” principle has served as a crucial bridge between China and the rest of the world, enabling it to become a global financial hub, a bustling trade center, and a cultural melting pot.

One of Hong Kong’s most important contributions to national development is its role as an economic catalyst. It provides world-class financial services and unparalleled connectivity. The city boasts one of the world’s freest economies, characterized by low taxation, minimal regulation, and a robust common law legal system.

Its business-friendly environment has attracted foreign investment and multinational corporations, facilitating trade and commerce that benefit Hong Kong, the broader Chinese economy, and the international community. As one of the largest equity markets in Asia, the city serves as a critical platform for companies seeking to raise capital. The Hong Kong Stock Exchange is a preferred listing venue for many Chinese mainland enterprises, providing them access to global investors.

Hong Kong is the largest global hub for offshore renminbi (RMB) transactions. Its substantial liquidity and numerous cross-border portfolio flow channels enable it to provide a comprehensive range of RMB financial services, including clearing and settlement, financing, asset management, and risk management.

In alignment with the national strategy, Hong Kong is working hard to become a rising center for innovation and technology. The Hong Kong Science Park and Cyberport have provided fertile ground for startups and tech companies and encourage collaboration between industry and academia.

The Hong Kong Special Administrative Region government recently approved the draft San Tin Technopole Outline Zoning Plan, which will be at the heart of the strategic Northern Metropolis and transform the area into a vibrant urban hub. It will unite innovation and technology enterprises, fostering synergies with Shenzhen’s innovation and technology cluster and serving as a diverse test bed for innovation. The government will create the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone.

Focusing on innovation and technology will enhance Hong Kong’s economic competitiveness. The city’s contributions to artificial intelligence, biotechnology and green technology support national development goals as China transitions to a more innovation-driven economy.

In addition, the Hong Kong SAR plays a crucial role in enhancing China’s soft power through culture and the arts. The West Kowloon Cultural District, or WestK, has firmly established Hong Kong as the cultural capital of Asia.

Critical landmarks like M+, the Hong Kong Palace Museum, the Xiqu Centre for Chinese operas, and Freespace, a contemporary performance hub, significantly enhance the district’s artistic landscape. The Lyric Theatre, scheduled to be completed in 2026, promises to improve the area’s cultural offerings further.

Through diverse programs and events, WestK has garnered significant international acclaim for promoting artistic innovation, cultural exchange, and community engagement.

The city’s rich heritage, diverse population, and vibrant arts scene create an exceptional platform for showcasing Chinese culture to international audiences. This fosters mutual understanding and strengthens the ties between China and the global community.

In addition to its cultural initiatives, Hong Kong’s educational institutions draw students and scholars from around the globe. With five universities ranked among the top 100 worldwide, the city solidifies its position as a global education hub. By nurturing talent from diverse backgrounds, Hong Kong enriches its local educational landscape and helps develop a skilled workforce that can effectively support national initiatives.

Building on its solid foundations, Hong Kong is a critical component of the Guangdong-Hong Kong-Macao Greater Bay Area, linking the economies of Hong Kong, Macao, and nine cities in Guangdong province. As of 2023, the GBA had a total population of over 86 million and a GDP exceeding 14 trillion yuan ($2 trillion). This dynamic region fosters collaboration across various sectors, including finance, technology, and innovation, driving national and regional economic growth. By leveraging its unique status, expertise and international connections, Hong Kong has established itself as a vital hub for capital flow, innovation and talent within the GBA.

Of course, the city has the capacity to significantly facilitate projects along the nation’s Belt and Road Initiative, combining its infrastructure and construction expertise with capital raising and professional services, and once again contribute to national and regional development.

The World Economic Forum forecasts that the Association of Southeast Asian Nations will become the world’s fourth-largest economy by 2030, with 70 percent of its nearly 700 million population entering the middle class and a consumer market valued at $4 trillion. Hong Kong is capitalizing on opportunities to expand collaboration throughout the bloc in many areas, including trade, finance, technology, and cultural exchange.

Additionally, Hong Kong in 2022 initiated the process of joining the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade bloc. Entry is anticipated in the near future, provided there are no unwarranted delays.

Membership will facilitate tariff reductions, streamlined customs procedures, strengthened supply chains, and increased cross-border investments. In addition to enhancing Hong Kong’s status as a trade hub, the RCEP presents opportunities for professional sectors like law and finance while bolstering the city’s role in education, services, and international arbitration. Furthermore, Hong Kong is an ideal center for currency settlement among RCEP members.

As China advances its vision of new quality productive forces, common prosperity, and a dual circulation economy, emphasizing the importance of domestic and international markets, the Hong Kong SAR’s unique strengths and strategic advantages position it as an indispensable partner throughout this journey.

The Hong Kong SAR will play a critical role in advancing the nation’s broader goals through its economic dynamism, focus on innovation, cultural exchange and financial prowess. As the world continues to change, the city’s contributions will play a valuable role in shaping a prosperous future for China.

The author is an international partner and member of the Global Advisory Board, MilleniumAssociates AG.

The views do not necessarily reflect those of China Daily.