Can Hong Kong reprise its role as China’s intermediary and window on the world?

China’s new-era socialist system is here to stay but economic reform and opening will continue, as will the successful ‘one country, two systems’
If Hong Kong wants to continue to succeed, its people must maintain their capacity for independent thinking, courage to give honest advice, and outward-looking character

Regina Ip

Published: 8:15am, 13 Nov, 2022

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At the Global Financial Leaders’ Investment Summit, hosted by the Hong Kong Monetary Authority earlier this month, Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, caused a stir by urging the audience not to read too much foreign media, but to study President Xi Jinping’s report to the 20th party congress instead.

Some foreign media took Fang’s half-joking remarks as an affront, but Fang was being disingenuous. Xi’s report, steeped in China’s history, politics, culture and Communist Party jargon, is not easy to comprehend.

In the context of modern China’s political and institutional development, it is a bold, defining statement about the coming to fruition of Marxism with Chinese characteristics.

The central message in the report’s first three sections is that the party, under Xi’s leadership, has firmly established a socialist system with Chinese characteristics, which fits in well with China’s society and blends seamlessly with China’s cultural and political traditions.

For the world, the message is that China’s new-era socialist system with Chinese characteristics is here to stay, despite a strong push by some Western powers to wage an ideological battle between democracy and autocracy, and put China squarely in the latter camp.

The importance of Xi’s ideological triumph cannot be overemphasised. It marks the culmination of a 100-year quest for a form of government that fits China’s political, social and cultural realities, and can solve people’s problems.

05:27

‘Socialism with Chinese characteristics’ explained

The quest dates back to Chinese intellectuals’ advocacy of constitutional monarchy in the late Qing dynasty, to early Communist founders’ exploration of Western-style electoral democracy, to the eventual installation of communism in mainland China in 1949.

A hundred years on, communism has taken root in China. It has worked far better in building a moderately prosperous and modern society, eradicating extreme poverty, and restoring national sovereignty and dignity than any other form of government in China’s recent past.

The report’s important economic messages should not be overlooked. Despite concerns that China under Xi might veer more to the left in mandating more state ownership and control, section four makes clear China’s new economic objective is “high quality”, not high-speed, growth.

While the state will set strategic directions, full use will be made of the market mechanism to allocate resources, ensure fair competition, raise service standards, protect property rights, improve the business environment, expand market access and deepen reform.

China understands too well that its second “100-year dream”, of national rejuvenation, hinges on growth. Economic reform and opening up under strategic control has to be its default choice.

“One country, two systems”, given the highest level of recognition since its implementation in 1997, is raised upfront and centre whenever Xi talks about reunification with Taiwan. A whole section (section 13) is devoted to the concept and its successful implementation in Hong Kong.

Many forget that one country, two systems was first mooted by Deng Xiaoping in the early 1980s with Taiwan in mind. With order restored and economic growth recharged, Hong Kong is once again an exemplar of how one country, two systems can work for Taiwan.

The geopolitical situation has changed radically since 1997. At that time, China was facing tough negotiations to join the World Trade Organization, while Hong Kong was lobbying for the US to renew China’s most favoured nation trading status.

00:43

Xi Jinping hails Hong Kong’s transition from 'chaos' to order in speech opening 20th party congress

Since then, China has seized the centre stage on international issues, from globalisation to climate change to the Covid-19 response. Above all, China’s relationship with the United States has undergone a sea change. The Biden administration now sees China as “ the most serious long-term challenge to the international order”.

To pre-empt China from “ tilt[ing] the global playing field to its benefit”, the US has built a network of alliances and partnerships to contain China, and banned exports of advanced semiconductors and equipment to China.

Although the two nations are not quite at daggers drawn, China has to brace for more hostilities on other fronts.

China’s heightened sense of national security threats arising from Western containment gives Hong Kong a new opportunity to reprise its role as China’s intermediary and window on the world. This is a role Hong Kong played extremely well before China’s newly modernised cities emerged as global business and financial hubs.

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Xi fully recognised Hong Kong’s contributions to China’s modernisation and its unique advantages as a “highly free and open” society “compatible with international rules”. In his July 1 speech in Hong Kong, Xi gave it full credit as “a pioneer riding the wave of our country’s great cause of reform and opening up”. He also said: “Everyone living in Hong Kong, regardless of their profession or belief, is a positive force for the development of Hong Kong.”

Hong Kong’s strong international linkages built over decades, and its unique culture were on full display at the recent investment summit and Hong Kong Sevens rugby tournament, both successfully held despite anti-epidemic controls.

Hong Kong is well positioned to maximise its competitiveness by leveraging its strong support from Beijing and making full use of its separate systems. But if Hong Kong wants to continue to succeed on this formula, its people must maintain the capacity for independent thinking, courage to give honest advice, and outward-looking character. No one owes Hong Kong people a living. We can only thrive if we work hard to continue to make a difference.

Regina Ip Lau Suk-yee is convenor of the Executive Council, a lawmaker and chairwoman of the New People’s Party