In the past 25 years, China, our motherland, has come to our rescue whenever we were in economic or political trouble. Much has been said about how the central authorities have thrown us a lifeline in our hours of need, but not enough on how we could give back to our country in the next 25 years.
Hong Kong does have some unique advantages, and here’s a discussion on ways in which Hong Kong can contribute to national development.
“One country, two systems” is a highly innovative, groundbreaking concept for conflict resolution. Accommodating a common law jurisdiction within a large, civil law system is not easy, and has sparked legal and judicial challenges. But they have been overcome by built-in safeguards for upholding national sovereignty in the Basic Law.
In the next 25 years and beyond, Hong Kong should make full use of its well-established common law system, its strong foundation as a global financial center, and its attraction as an international innovation and technology hub to support our country’s continuous opening-up and modernization
The common law system in Hong Kong has proved to be a living institution that can evolve and adapt to new constitutional realities. In the civil law area, the Hong Kong Special Administrative Region government has reached agreement with mainland authorities for reciprocal recognition and enforcement of civil judgments in matrimonial and family cases, in commercial matters, and in rendering mutual assistance in bankruptcy proceedings. Such agreements are enabled by Article 95 of the Basic Law, which provides for mutual juridical assistance between the mainland and Hong Kong. These are huge steps forward toward resolving disputes with cross-boundary elements.
In the criminal justice area, two years after the implementation of the National Security Law for Hong Kong, local courts have fully accepted the need to give priority to provisions in the National Security Law. Not only that, but in several landmark judgments, local courts have demonstrated that the National Security Law can be implemented in tandem with local laws, fully manifesting “convergence, compatibility and complementarity” between the two systems. This is a tremendous achievement that testifies to the vitality of “one country, two systems”.
Going forward, Hong Kong is not only on course to becoming the Asia-Pacific region’s premier international legal and dispute-settlement center, as provided in the 13th Five-Year Plan (2016-20) and 14th Five-Year Plan (2021-25), but also a catalyst for convergence of the mainland’s legal system with the common law system in important areas.
The predictability and transparency of the common law system underscores Hong Kong’s ongoing development as a global financial center. Hong Kong is well known for the buoyancy of its stock market and its fundraising ability for initial public offerings. As a wealth management center, the financial assets under management in Hong Kong have soared to $4.5 trillion.
Hong Kong is the largest offshore RMB capital pool, and accounts for 75 percent of China’s offshore RMB transaction clearances. In recent years, various programs have been launched to strengthen capital market connectivity between the mainland and Hong Kong, such as the Stock Connect programs with Shenzhen and Shanghai, and the Southbound Bond Connect and Cross-boundary Wealth Management Connect Scheme for the Guangdong-Hong Kong-Macao Greater Bay Area. Since the launch of the Stock Connect programs, Hong Kong has facilitated net northbound inflow of 1.6 trillion yuan ($239 billion) to the mainland’s stock markets.
Apart from facilitating the flow of funds between the mainland and, through Hong Kong, the rest of the world in an orderly and controlled manner, Hong Kong is using its ebullient stock and capital markets to facilitate the internationalization of the RMB.
With its sound regulatory system, Hong Kong provides a fertile ground for financial innovation. Hong Kong has been issuing green bonds and developing new financial products in support of the nation’s sustainable development objectives. In addition, Hong Kong is introducing new regulatory regimes for high-risk virtual assets, such as the distribution of security token offerings and management of virtual assets. All these would broaden Hong Kong’s financial markets, as well as enable mainland authorities to assess the risk-reward balance of new financial products and virtual assets.
The central authorities have pledged support for Hong Kong as an international innovation and technology center. Hong Kong is well placed to buttress the mainland’s drive for advanced manufacturing and high-tech development. With five local universities included in the world’s top 50, and strong research-and-development capabilities in biomedical research, robotics, health tech and quantum technology, among others, within Hong Kong’s top universities, and an open and internationalized environment, Hong Kong is a magnet for technology talents from all over the world.
To broaden Hong Kong’s economic structure, in recent years the Hong Kong SAR government has allocated a hefty HK$150 billion ($19.1 billion) to boost technology development. Gross domestic expenditure on R&D has risen to 0.99 percent of GDP. The San Tin Technopole, located in the San Tin/Lok Ma Chau area, under planning as part of the Hong Kong-Shenzhen Close Interaction Circle, will have a substantially increased area to facilitate technology development. For the first time in the SAR’s history, an outstanding scientist from the mainland has been appointed to head the Innovation and Technology Bureau. The pledges made by the new Tech Bureau head to build Hong Kong’s “smart city”, deepen technological collaboration between Guangdong and Hong Kong, improve Hong Kong’s ecology for “reindustrialization”, and to strengthen Hong Kong’s links to the international academia and tech community augur well for Hong Kong’s technological development.
Finally, Hong Kong can continue to leverage its extensive international network built up over decades of trading, investing, shipping and logistics activities overseas to serve as the mainland’s conduit with the rest of the world. Hong Kong is well positioned to assist the mainland in taking forward projects under the Belt and Road Initiative, thanks to Hong Kong’s strong people-to-people bonds between its Fujian, Chiu Chow and Hakka communities with their counterparts overseas. Hong Kong’s advantageous geographical location combined with its externally oriented economy and culture give Hong Kong a unique advantage in serving as the nation’s special channel for communication with the international community.
In the next 25 years and beyond, Hong Kong should make full use of its well-established common law system, its strong foundation as a global financial center, and its attraction as an international innovation and technology hub to support our country’s continuous opening-up and modernization. A historic window of opportunity beckons, and Hong Kong must not miss this call.
The author is convener of the Executive Council and member of Legislative Council.
The views do not necessarily reflect those of China Daily.