For pessimists, the Hong Kong Special Administrative Region’s role as the gateway to China is diminishing as the Chinese mainland continues to open up its economy and financial system; but for optimists, China’s new round of reform and opening-up, as decided and announced by the Communist Party of China Central Committee at its recently concluded third plenary session, heralds a greater role for the SAR in the country’s opening to the outside world and aligning with international standards and rules.
The resolution adopted by the CPC Central Committee at the plenum calls for deepening reform and opening-up to advance Chinese modernization, highlighting the direction of “steadily expanding institutional opening-up”.
Institutional opening-up boils down to the country’s alignment with high-standard international economic and trade rules, with the ultimate objective of further integrating its economy into the global economy. As an open economy underpinned by a set of institutions and systems that fully align with international standards and rules, Hong Kong provides a reference for the country in the process of developing new institutions and systems that fit a higher-standard open economy. The SAR can also continue to serve as a testing ground for measures and initiatives aimed at promoting the development of a higher-standard open economy at the national level.
The objective of building a high-standard socialist market economy, as declared in the resolution of the CPC Central Committee plenum, entails effective bidirectional flow of capital, technology, and talent. Hong Kong can serve as an important bridge connecting the mainland and the global market.
First, as one of the world’s major international financial centers, Hong Kong provides comprehensive, sophisticated and reliable international financial services. It can provide mainland enterprises with diversified financing channels to tap into international capital, as well as risk management tools, to help them grow and build global competitiveness. Simultaneously, by leveraging its international connectivity, Hong Kong can serve as a platform for mainland enterprises to expand to overseas markets.
Second, Hong Kong’s strengths in legal services will be helpful in facilitating the country’s high-standard opening-up. As the only common law jurisdiction in China with an internationally recognized Judiciary, Hong Kong enjoys an edge in becoming a service hub for dealmaking and resolving commercial disputes involving cross-border partners. Hong Kong is emerging as the leading center for international legal and dispute resolution services in the Asia-Pacific region. This role will expand as international cooperation between the mainland and partner countries grows along with China pursuing high-standard opening-up.
Third, leveraging on its strength in higher education and a strong foundation of scientific and technological research and development (R&D), Hong Kong can build a platform for scientific research institutions at home and abroad to cooperate and collaborate in R&D, and for research institutions to work with enterprises to facilitate the realization and commercialization of R&D results. The objective is to develop Hong Kong into an international innovation and technology hub that can contribute to the expansion of China’s innovation capacity.
Fourth, as the most open and internationalized Chinese city, Hong Kong has an advantage in helping the world better understand China’s vision of “a community with a shared future for mankind” and Chinese modernization. Being a melting pot of Chinese, Western, and other cultures with a huge community of expatriates and a bilingual environment, Hong Kong is an important platform for cultural exchanges between China and foreign countries, sponsoring a large number of international cultural exchanges and activities, which help the international community better understand and appreciate Chinese culture. It goes without saying that understanding is the first step to acceptance and cooperation.
Hong Kong’s role as a bridge for two-way exchanges between China and the rest of the world will continue for the foreseeable future, as its unique advantages under the “one country, two systems” principle remain intact notwithstanding what the naysayers have said. The city’s unique strengths will allow it to continue to play a significant role in promoting Chinese modernization and China’s high-standard opening-up. This is especially true after the CPC Central Committee decided in its third plenary session to improve mechanisms to see both the Hong Kong and Macao SARs playing a greater role in China’s opening to the outside world. It is safe to assume that the measures will be in the pipeline soon. Hong Kong Chief Executive John Lee Ka-chiu said in his 2023 Policy Address that the SAR government will strive for the extension of measures “allowing Hong Kong-invested enterprises to adopt Hong Kong law” and “allowing Hong Kong-invested enterprises to choose for arbitration to be seated in Hong Kong” from Qianhai, Shenzhen and pilot free-trade zones in the mainland to the whole Guangdong-Hong Kong-Macao Greater Bay Area. This proposed extension could be covered in the institutional opening-up promised by the CPC Central Committee in its plenum resolution.
The author is a current affairs commentator.
The views do not necessarily reflect those of China Daily.
