Summit of all fears
Tammy Tam and Teddy Ng in Beijing
Next week's summit of the leaders of the G20 group of countries in Los Cabos, a scenic city in southern Mexico, will give President Hu Jintao an opportunity to show that China has a role to play in handling the global economic crisis.
Yet Hu, who has served as China's president for the past 10 years, knows all too well that this time he has many challenges to face, both at home and abroad, some of which may prove to be the toughest of his career.
At home, mainland China's latest economic data shows inflation at three per cent, its lowest level in 23 years, signalling a slowing down in growth rate of the world's second largest economy.
Abroad, Hu will have no time nor will he be in the mood to appreciate the beautiful scenery of the Mexican city where he and his G20 counterparts will meet.
No one could have predicted, when the summit's dates were set last year, that the meeting of the world's 20 most powerful leaders would coincide with an election in Greece, on June 17, the outcome of which will have a huge bearing on the economic crisis that has threatened both Europe's and the world's economic recovery due to Greek difficulties in repaying formidable debts.
'Last year, it was said that the Cannes G20 Summit was 'hijacked' by Europe. This year, it happens that Greece will have its new election just one day ahead of the summit. We'll see what is the outcome', said Vice-Foreign Minister Cui Tiankai, during a briefing on China's preparations for the summit.
Cui was at ease during an interview with the South China Morning Post and another newspaper, but it was clear that he could not afford the luxury of relaxation, as he is responsible for keeping Hu briefed on developments in Europe, with the latest news indicating Athens has predicted Greece could run out of money next month as government income, especially tax revenue, dries up during a worsening recession.
When asked how serious Beijing expects the euro-zone crisis to become, and how it would affect Hong Kong - a city whose open market makes it particularly vulnerable - Cui struck a confident note, pointing out that Hong Kong's financial officials will take part in the G20 summit as deputies in the Chinese delegation. According to Cui, this will demonstrate that Hong Kong and Beijing will work together in facing the crisis.
Cui said he believes Hong Kong can overcome the financial crisis, thanks to the support of the central government. 'Even though the euro zone's debt crisis keeps deepening... I think Hong Kong and the mainland can jointly fight the crisis,' he said. 'If the mainland economy can pass through the difficulties, Hong Kong's economy can too.'
The looming difficulties are also expected to be a test of Financial Secretary John Tsang Chun-wah's abilities, ahead of his inclusion in the cabinet of chief executive-elect Leung Chun-ying, who takes office on July 1.
This situation parallels the one faced 15 years ago by Tung Chee-hwa, the city's first chief executive, who had to deal with the Asian financial crisis soon after being sworn into office. The euro-zone crisis and the blow it may inflict on Hong Kong's economy may be Tsang's first big test in the new government.
A Hong Kong government source confirmed both Tsang and Norman Chan Tak-lam, the chief executive of the Hong Kong Monetary Authority, will attend the G20 summit, at which they and their European counterparts will take a close look at the developments unfolding in Greece.
The two Hong Kong officials will also be able to monitor whether there are likely to be any regulatory amendments made in Europe, and the possible impact on the Hong Kong property market of fluctuations in interest rates in European markets.
'The financial secretary's office has been keeping a close eye on what's going on in Europe, including the upcoming election in Greece, and it is no exaggeration to say that we're monitoring the situation day and night,' said a person close to Tsang.
In the space of a few weeks Tsang has issued three warnings that the bubble in Hong Kong's property market is in danger of bursting, while chief executive-elect Leung has said he would like his financial secretary to focus on the global financial situation and be well prepared for any possible crisis.
In his interview, Cui also said that Hong Kong had played a positive role in shaping China's international profile, with the city providing an economic and financial hub that attracts many mainland companies. Some of these mainland companies have also made investments overseas via Hong Kong, he pointed out.
It is understood that mainland firms are frequently questioned by the West over their allegedly hidden political agendas when seeking to make overseas investment. In order to avoid such difficulties some prefer to seal deals as Hong Kong-registered or -listed companies, which have less 'political colour'.
The central government has also supported Hong Kong's participation in international agencies, such as the Asia-Pacific Economic Co-operation (Apec) forum, and Cui cited the example of Dr Margaret Chan Fung Fu-chun , who was the city's director of health before she became the head of the World Health Organisation in January 2007.
'Chan is the first Chinese person to be the number one at an international agency,' Cui said. 'China did not nominate someone else from [the mainland] for such a top position, but instead chose Chan from Hong Kong ... The central government attaches great importance to Hong Kong talents.'
Another example cited by Cui was of the G20 meeting in 2009, when Hu opposed Hong Kong and Macau's inclusion on a list of tax havens, which would have made the two special administrative regions less popular among investors.
Cui, who will visit Hong Kong to celebrate the 15th anniversary of the establishment of the Foreign Ministry Commissioner's Ofice in Hong Kong, said the city could aid Chinese diplomacy by successfully implementing the concept of 'one country, two systems'.
'The successful implementation of the concept is proof that China is true to its words,' Cui said.
The number of Asian countries at the G20 table: China, Japan, South Korea, India and Indonesia