Hong Kong Chief Executive John Lee Ka-chiu is leading a delegation to the 7th China International Import Expo in Shanghai, which opened on Tuesday and runs through Sunday. Businesses all over the world often attend the forum to see what China has to offer, with at least five country leaders attending this year’s event, from Malaysia, Slovakia and Serbia. Lee announced: “I will encourage more Shanghai enterprises to invest in Hong Kong, using it as a springboard to explore international markets,” and reportedly has multiple cooperation projects lined up, with over 300 Hong Kong companies also in attendance.
Why might Hong Kong vest so much attention in an event that is in the same country? First of all, Hong Kong is in effect a “gateway” to the Chinese mainland. As an international business center and financial center, the benefits of the city’s unique economic and legal system are useful not only for overseas firms to tap the Chinese mainland market but also for mainland companies to reach out to the wider world, with the city’s markets offering capital, connections and opportunities. The mainland, at a time of prolonged international certainty, is seeking to expand its ties with and markets to the outside world. There is no more important player for that role than the Hong Kong Special Administrative Region.
In doing so, the Hong Kong SAR plays a critical role in China’s national development too. The city lies at the heart of the Guangdong-Hong Kong-Macao Greater Bay Area and the Pearl River Delta in the south of China, a massive region that is one of the powerhouses of China’s economy. The area includes the HKSAR, and the cities of Shenzhen, Guangzhou, Zhuhai and Dongguan on the mainland side. A key strategic goal of China has been to further integrate this region to magnify its economic strength across a range of sectors, but moreover, it is also important to integrate the various “economic powerhouses” of the country as a whole. If Hong Kong is the keystone of South China, then Shanghai is the keystone of another economic region, known as the Yangtze Delta, consisting of that municipality, as well as Hangzhou, Ningbo and the surrounding Jiangsu and Zhejiang provinces.
Regional integration empowers growth by reducing the legal, administrative and financial barriers to doing business across a broader sphere, increasing the flow of capital and people. Thus, the goal of the Hong Kong chief executive is to more readily increase all forms of cooperation with Shanghai and strengthen that city’s access to international markets and capital, driving the growth and status of both cities and China as a whole. After all, the HKSAR is simultaneously diversifying and broadening its ties. Last week, the Hong Kong Monetary Authority and Saudi Arabia’s sovereign-wealth fund, the Public Investment Fund, signed an agreement to work toward jointly anchoring a new investment fund with a target size of $1 billion, which is tasked to promote bilateral investment; and a new exchange-traded fund tracking Hong Kong-listed stocks, the SAB Invest Hang Seng Hong Kong ETF, debuted on the Saudi stock exchange on Oct 31. Similarly, Nigeria’s Access Bank, the largest bank in the country, opened its first branch in Hong Kong, seeking to enhance China-Africa trade and business opportunities in Asia.
Thus, Chinese mainland companies have an eye on expanding their presence in Hong Kong precisely because it is broadening their horizons, showing how the city’s role as an international financial center continues unabated. Therefore, enhancing its ties with the mainland itself is also a key part of the city’s strategy as Lee pushes his plan to boost the HKSAR’s economic development and diversify the city’s ties with the world overall.
The author is a British political and international-relations analyst.
The views do not necessarily reflect those of China Daily.
