Political unrest, trade war highlight bay area’s importance to Hong Kong, analysts say
- Analysts and policymakers at Caixin GBA forum urge acceleration in integrating Hong Kong, Macau, and the Guangdong region
- The trade war too has heightened the need for China to maintain its links with the world, said Xiao Geng, a professor at Peking University HSBC Business School
The recent political turmoil to engulf Hong Kong serves to underscore the importance of the city’s future role in the Greater Bay Area and the opportunities it stands to gain from the planned economic hub, according to business leaders and analysts.
Hong Kong is widely seen as perfectly poised to take the lead in the development of Beijing’s scheme, its liberal economy, international standards and role as a gateway between China and the wider world making it the ideal blueprint from which the bay area can evolve.
“The recent protests showed it is important to implement the Greater Bay Area projects as soon as possible,” said David Wong, permanent honorary president of the Chinese Manufacturer’s Association of Hong Kong.
“There are many economic and livelihood problems in Hong Kong. If the Greater Bay Area projects can offer more business opportunities for Hong Kong youngsters to develop their careers, it would help solve these problems.”
He was speaking on the sidelines of the Hong Kong-ASEAN Summit 2019 on Monday, which focused on Greater Bay Area opportunities.
The recent protests have seen millions of angry Hongkongers, mainly young people, take to the streets. Although their main aim was to crush a controversial extradition bill, many described wider grievances such as the city’s huge income inequality and unaffordable property prices.
Financial Secretary Paul Chan, speaking at the same forum, said he was confident in Hong Kong’s long-term prospects despite the recent political and economic upheaval which saw millions of demonstrators, predominantly young people, take to the streets.
Greater Bay Area is more than a map – it’s a vision for Hong Kong and Macau to lead China’s modernisation
“The government will continue to support free trade policies and to capture the opportunities from the Greater Bay Area and Belt and Road Initiatives,” Chan said.
The trade war too has underlined Hong Kong’s importance to the future success of the bay area scheme because it has heightened the need for China to maintain its links with the world, according to Xiao Geng, a professor at the Peking University HSBC Business School.
“Many China hawks are pushing for a decoupling between the United States and China as the trade dispute intensifies. But the development of China requires integration with the world,” said Xiao during a panel discussion at the Caixin GBA forum on Friday.
Hong Kong is particularly important because it retains the deepest connection with the outside world as a part of China, he said.
“Hong Kong has an outstanding significance for China amid the trade war,” said Cao Zhongxiong, an executive director at Shenzhen-based think tank, the China Development Institute.
“Hong Kong has been considered a free trade hub that has a solid foundation for commerce and technology exchange. Its culture makes it easy for international talent to adapt to.”
Shaun Rein, the managing director of China Market Research Group, said given the recent political unrest in the city, it was natural for Beijing to consider reducing its reliance on Hong Kong.
“However, in practise, there is no one Chinese city could be picked as an alternative that bears the strengths Hong Kong has, from its legal framework, to free flow of information,” he said.
Mass protest draws tens of thousands to streets of Kowloon in protest against Hong Kong extradition bill
The city operates semi-autonomously from China, with its own currency and a separate status from the mainland when it comes to trade with countries such as the US. Hong Kong’s arrangement with Washington was spelled out in the US-Hong Kong Policy Act, enacted in 1992 ahead of the handover from Britain to China in 1997, giving the city special treatment in trade, customs, technology and cultural exchanges.
The greater bay region should use Hong Kong as a benchmark, effectively developing into a bigger version of the city, so that China could “prove its resolution to the States and other countries about its reform resolution,” said Xiao.
The Greater Bay Area is a national plan endorsed by China’s top leaders early this year to link Hong Kong and Macau with Shenzhen and eight other cities in Guangdong province, to create a global technology and economic hub to rival Silicon Valley.
However, specific rules on how to integrate the region – enabling the free flow of capital, goods, people, and information – have yet to be announced. The cities involved operate different legal, tax, and policy regimes.
