General Secretary Xi Jinping of the Central Committee of the Communist Party of China repeatedly emphasized the need for the country to pursue “high-quality development” in his report to the 20th Party Congress. “High-quality development” should also be the objective of socioeconomic development in the two special administrative regions of Hong Kong and Macao. But how shall the two SARs proceed?
The recently published guidebook on the 20th Party Congress work report, which includes an article authored by Xia Baolong, director of the Hong Kong and Macao Affairs Office of the State Council, on how to uphold “one country, two systems” in the long run, sheds light on the relevance of the two SARs to the country’s high-quality development. Xia stressed in his article the need to be mindful of the rapidly changing global landscape in the course of the country’s modernization pursuit, as well as the need to better harness the strengths of Hong Kong and Macao to meet the needs of the country, to enhance the “strategic planning” and “top-down design” for the socioeconomic development of Hong Kong and Macao, and to position the two cities to better serve the overall development of the country.
In his speech marking the 25th anniversary of the Hong Kong Special Administrative Region on July 1, President Xi Jinping said Hong Kong should adopt a proactive governance philosophy so that “a proactive and capable government and an efficient market will complement each other” in facilitating socioeconomic development in the SAR. He was actually urging the SAR government to shift from a defensive strategy to an aggressive one. The former may fare well during the upward economic circle but will fail for sure during the downward cycle.
By raising the notions of “strategic planning” and “top-down design”, which reflect the essence of Xi’s remarks, Xia was actually urging Hong Kong and Macao to cast away the old “positive nonintervention” or “big market, small government” governance philosophy, and proactively promote high-quality development under a new model that leverages not only an efficient market but also a proactive and capable government.
The global economic environment keeps deteriorating in the midst of the lingering COVID-19 pandemic, a worsening energy crisis in Europe, and surging inflation and interest rates in many major economies. It is very difficult for Hong Kong’s economy to get out of the current downward cycle.
The HKSAR government should not wait out the economic recession; it must do whatever it can to reverse the downward spiral. The government should have the courage to take the lead in strengthening the local sectors that are facing fierce external competition so as to make the city stand out from its competitors. The government should also strive to create a favorable environment and conditions for the local sectors that fare well in an efficient market. In other words, a proactive and capable government complements an efficient market.
Xia urged the HKSAR government to proactively explore and identify the right path of development for Hong Kong in response to the shifting global landscape, consolidate the city’s status as international financial, shipping and trading centers, and foster emerging industries.
Although Hong Kong’s financial industry is highly competitive, the city cannot rest on its laurels as it is not without rivals. In April this year, Singapore’s daily foreign exchange trading volume increased by 0.3 percent to US$549.5 billion, surpassing that of Hong Kong, and has become the largest foreign exchange market in Asia-Pacific. It is a wake-up call for Hong Kong that it must not be complacent about its global financial standing.
The SAR government and the financial sector have leaped into action in the face of external competition. The Global Financial Leaders’ Investment Summit, held last week, was a significant move as well as a leverage point for the local financial industry.
Chief Executive John Lee Ka-chiu has also introduced measures in his maiden Policy Address aimed at injecting vitality into Hong Kong’s economy. For instance, the city will establish the Office for Attracting Strategic Enterprises to attract strategic enterprises from around the globe; set up a Co-Investment Fund to attract enterprises to establish a presence in Hong Kong and invest in their businesses or individual projects through a co-investment model, which will drive industry development and create employment opportunities; and establish the Hong Kong Investment Corp Ltd to invest in strategic industries and generate returns.
The above-mentioned are pragmatic and significant measures, signaling a departure from the noninterventionist approach. But the SAR government can go further in this direction.
The 20th Party Congress work report mentioned that “we must regard science and technology as our primary productive force, talent as our primary resource, and innovation as our primary driver of growth”. Hong Kong must also strive to build up these three primary elements should the city wish to enhance its competitiveness, attractiveness and influence.
Hong Kong society is now concerned about a brain drain. Thanks to its sense of crisis, the SAR government has rolled out new policies to “grab” talents, as revealed in the Policy Address. Top talents, however, are not readily “grabbed”. Creating an appealing environment is crucial to attracting top talents, which shall comprise high-end enterprises, distinguished business partners, world-class infrastructure, pleasant working conditions, quality services, etc. Similarly, the development of advanced technology also requires a favorable breeding ground to ensure its sustainability, and much work has yet to be done in this regard.
There is little doubt that Hong Kong cannot achieve high-quality development without the support of the Chinese mainland. Explaining how Hong Kong can better align with the mainland’s development, Xia indicated that the central authorities will keep innovating its institutional mechanisms to facilitate Hong Kong’s and Macao’s wide participation in the Belt and Road Initiative and the national 14th Five-Year Plan (2021-25), particularly the Guangdong-Hong Kong-Macao Greater Bay Area.
The GBA is the common home for the three places, and Hong Kong’s participation in the GBA should not be narrowly interpreted as “contributing to the development of the mainland”. Hong Kong of course has some advantages over other partners in the city cluster that are hard to replicate, but it is also beset by some obvious shortcomings, such as the lack of a high-end manufacturing sector, limited development space, and the high cost of living. Hong Kong should look at the big picture and see the development of the GBA as a pivot to elevate its own socioeconomic development to a new level.
The author is a Hong Kong member of the National Committee of the Chinese People’s Political Consultative Conference and chairman of the Hong Kong New Era Development Thinktank.
The views do not necessarily reflect those of China Daily.