Why we should thank Mao for Hong Kong’s success
Liu Jia says the ‘one country, two systems’ policy and the Basic Law – the foundation of the city’s development – are the result of the visionary leadership guiding modern China, starting from the Mao Zedong years
Hong Kong is a global financial centre today, but how did it become one? Some people think its status as a financial hub makes it far superior to other Chinese cities. Some might even attribute the success to British colonial rule.
From a historical perspective, however, Hong Kong’s success as an international financial centre is not inevitable, and is closely tied to China’s history, especially that of modern China. The city owes its success to the ideologies of the leaders of modern China and their determination to benefit the country. In fact, the “one country, two systems” concept is an inseparable part of their ideologies to build a prosperous country; it is the fruit of a people’s wisdom, born of their struggles over the long years of their country’s painful history.
The founding of modern China in 1949 marked the end of more than a century of foreign aggression and civil war. At the time, the British government was prepared to leave Hong Kong, as it knew it could not confront the People’s Liberation Army. Yet, the PLA stopped at the Lo Wu frontier and did not try to drive British soldiers out of Hong Kong.
This visionary decision reflected the collective wisdom of the leaders of modern China, led by Mao Zedong (毛澤東), who were pragmatic in their pursuit of a better future for their country and its people. This kind of thinking led to the development of the “one country, two systems” principle, which made possible Hong Kong’s peaceful return to China, and the formation of the Basic Law. The “one country, two systems” principle and the Basic Law demonstrated responsible and far-seeing leadership, products of Chinese cultural wisdom.
Though stock trading was introduced by the British in 1891, it alone did not make Hong Kong an Asian financial centre. The city’s financial and securities industries only took off in the period after the Sino-British Joint Declaration was signed in 1984. In 1986, the city’s stock exchange became a member of the World Federation of Exchanges.
In the 1980s, Western countries, including Britain, recognised Hong Kong’s position as a doorway to a China that was opening up to the world, and began to shift their investments to the city. This period witnessed several significant financial events, including the introduction of a US-dollar-linked exchange rate system. Prior to the signing of the Joint Declaration, Hong Kong experienced economic turmoil amid a lack of confidence in the reunification, with the Hong Kong dollar dropping sharply. It was under these circumstances that the colonial government decided to peg the Hong Kong dollar to the greenback.
But why did the colonial government not link the Hong Kong dollar to sterling? This suggested that the UK did not see Hong Kong as one of its own, and it did not want to shoulder responsibility as Hong Kong’s administrator. Rather, responsibility for the city’s fate was passed over to the international community, and to China.
Therefore, Hong Kong’s rise to a global financial hub is not due to its history as a British colony, but because the city is in close proximity to – and an inseparable part of – China. The “one country, two systems” policy and the Basic Law are the real reasons for Hong Kong’s success.
Alone among the “four Asian tigers” of fast-developing Asian economies today, Hong Kong is on an upward trajectory, while the other three are stagnating. This brings home how the Basic Law and “one country, two systems” have helped Hong Kong continue to flourish as a global financial centre.
It is true that part of Hong Kong’s success today is related to the efforts of its people during the colonial period and the combination of fine attributes in Chinese and Western cultures. However, the role of modern Chinese leaders in developing the country since 1949, and the “one country, two systems” principle that guides Hong Kong, have also played an important part.
Liu Jia is a member of the Chinese Association of Hong Kong and Macau Studies and executive director and deputy general manager at China Everbright Holdings Company Limited. This is translated from the Chinese