Political impact of Qianhai expansion on Hong Kong

A lot of ink has been spilled on the economic significance of the Qianhai geographical and functional expansion to Hong Kong. However, its political impact on Hong Kong will be as great, if not greater.

In 2010, Beijing laid out the plan to develop Qianhai, a small area within Shenzhen, into a hub of modern services, financial services in particular, by giving it special powers and through deepening its institutional linkages with Hong Kong. At that time, I was head of the Central Policy Unit of the Hong Kong Special Administrative Region government. Back then, this ambitious project received a lukewarm reception from the officials in charge of Chinese mainland-Hong Kong affairs. Some officials were worried about the rise of an unneeded and possibly strong competitor just around the corner. They were especially leery of the erosion of Hong Kong’s status as an international financial center by an upstart financial hub nurtured by Beijing. Back then, the HKSAR government did not see the crucial importance to Hong Kong’s future of economic integration with the mainland. Despite impassioned pleas by Beijing and Shenzhen to provide staunch support to the development of Qianhai, the posture of the HKSAR government was one of reluctance or half-heartedness. At the same time, to avoid being seen as interfering and overbearing, Beijing abstained from putting great pressure on the HKSAR government on that matter. In Hong Kong, though the economic linkages between the city and the mainland were growing very fast, the mainland was yet to be seen by Hong Kong’s political and economic elites as indispensable to the city’s economic future, and the HKSAR government was under minimal pressure from the business community, let alone the public, to forge close ties with Qianhai. Moreover, the recalcitrant and obstreperous political opposition of Hong Kong, stridently anti-China and opposed to any form of economic integration between Hong Kong and the mainland, made it politically very difficult and costly for the HKSAR government to forge close economic connections with the mainland even if it had the intention to do so. Therefore, both the “pull” factor from Beijing and Qianhai and the “push” factor from within Hong Kong were too weak to bring about a strong economic relationship between Hong Kong and Qianhai. Nevertheless, despite the limited involvement of the HKSAR government and the business community of Hong Kong, Qianhai over the years has still been able to achieve remarkable results with the support of Beijing and Shenzhen. 

The two places (Hong Kong and mainland) will be increasingly intertwined particularly in the economic and financial sense. In the future, Hong Kong can not only obtain the desperately needed development impetus from the country, it can also contribute to the country’s development by making best use of its unique and indispensable advantages under “one country, two systems”

Both the “pull” and “push” factors have become significantly stronger, creating a qualitatively different political environment which is more conducive to accelerating the integration of Qianhai and Hong Kong. The changes in the international situation, particularly the determination of the United States to contain China’s rise, and the unsustainability of the original Chinese development model have impelled Beijing to adopt a new development model which hinges upon innovation, advanced technology, modern services, finance and domestic consumption. Shenzhen is empowered and tasked to spearhead the next stage of reform and opening-up of China and foster the emergence of new economic sectors. It is in this context that the geographical area of Qianhai is to expand by a factor of eight. Qianhai has been delegated additional powers to undertake institutional and policy reforms to bring about a higher level of institutional and policy compatibility and convergence between it and Hong Kong. All these have made Qianhai an unprecedentedly attractive place to Hong Kong’s businesspeople and professionals in various economic sectors who are now looking avidly for new development opportunities beyond the saturated markets of Hong Kong. In addition to the industrial and financial sectors, the educational, legal and healthcare sectors also are covetous of the offers from Qianhai. At the same time, the violent uprising in Hong Kong during 2019-20 exposed the deep-seated and increasingly serious economic, social and livelihood problems of Hong Kong. Moreover, lately and in view of Hong Kong’s political and economic plight, Beijing has a strong sense of urgency to speed up Hong Kong’s economic integration with the mainland and, through it, to secure Hong Kong’s long-term prosperity and stability. The Guangdong-Hong Kong-Macao Greater Bay Area project, the project to strengthen the linkage between Shenzhen and Hong Kong, and lately the project of Qianhai’s geographical and functional expansion are thoughtful strategies envisioned by Beijing to “pull” Hong Kong toward the mainland. Another “pull” factor is that Beijing will strongly urge the HKSAR government to actively take part in these projects and hold it accountable for its performance in doing so.

Simultaneously, the recent violent turmoil in Hong Kong and its souring relationship with the West have generated a sense of crisis among Hong Kong’s political and economic elites. Even though the ideas of the Greater Bay Area, Shenzhen-Hong Kong cooperation and Qianhai have yet to receive much attention from most Hong Kong residents, government officials, businesspeople and professionals are increasingly interested in the developments in the mainland cities bordering Hong Kong and aware of their importance to Hong Kong’s future. Both the political and economic elites are aware of and appreciative of the sincerity and capability of Beijing to bring Hong Kong out of its social and economic straits. Therefore, the announcement of Qianhai’s expansion has elicited an extraordinary level of interest and enthusiasm among Hong Kong’s elites. To respond to the expectations of or demands from Beijing, government officials, politicians, businesspeople, academics, professionals, think tankers and the media have scrambled to come up with multiple wide-ranging proposals to accelerate the integration of Hong Kong with the Greater Bay Area in general and with Qianhai in particular. Most notably are the proposals to develop the northern part of the New Territories, which is currently a wastefully underutilized area of abandoned farmland and protected wetlands. Rail links between Qianhai and the northwest New Territories are proposed. There are serious suggestions that the areas bordering Shenzhen be developed into a new business-cum-financial district, an innovation-technology-educational hub as well as a residential area to alleviate the shortage of housing in Hong Kong. Hong Kong-style hospitals and schools to be built in Qianhai to serve mostly Hong Kong people are also proposed.

In the run-up to the Legislative Council and chief executive elections, Qianhai is bound to become an important electoral issue. Different candidates and the groups behind them are expected to curry favor with Beijing by showing their enthusiasm for Hong Kong’s economic integration with the mainland.

In addition to the exhortations from Beijing and the enticements from Qianhai, the HKSAR government is now under the tremendous pressure of the “push” factor coming from the political and economic elites of Hong Kong. They are adamant that the government gives up the doctrine of positive non-interventionism and adopts a strong leadership role in Hong Kong’s economic development. Institutional and policy planning of sorts is no longer taboo as it is urgently needed in facilitating comprehensive integration between Hong Kong and Qianhai. 

The pressures from the political and economic elites apparently have produced their intended effects as the government is now more enthusiastic and proactive in planning for and strengthening Hong Kong’s linkages with Qianhai, Shenzhen and other cities in the Greater Bay Area. At the same time, the demise of the political opposition and its banishment from the governing institutions of Hong Kong have removed a major stumbling block to mainland-Hong Kong integration. 

Today, both the “pull” and “push” factors have engendered an “infatuation” with Hong Kong-mainland integration and especially with Hong Kong-Qianhai, which has not been seen before. Under the leadership, guidance and support from Beijing and with the new-found enthusiasm with mainland-Hong Kong integration from the government as well as the political and economic elites of Hong Kong, we can be realistically confident that a major turning point in mainland-Hong Kong relationship has been reached. The two places will be increasingly intertwined particularly in the economic and financial sense. In the future, Hong Kong can not only obtain the desperately needed development impetus from the country, it can also contribute to the country’s development by making best use of its unique and indispensable advantages under “one country, two systems”.

The author is a professor emeritus of sociology at the Chinese University of Hong Kong, and vice-president of the Chinese Association of Hong Kong and Macao Studies.

The views do not necessarily reflect those of China Daily.