Apply Hong Kong rules on Shenzhen side of shared innovation hub, adviser to Chinese policymakers says
- Only ‘radical reforms’ at Lok Ma Chau Loop can serve country’s development needs in face of West’s economic sanctions, argues Professor Zheng Yongnian
- Financial industry should also be included in official plan for zone, he says, calling the sector one of Hong Kong’s unmatchable strengths
An innovation hub that straddles Hong Kong’s border with Shenzhen should be run according to rules adopted in the financial hub, an adviser to Chinese policymakers has said, arguing that only “radical reforms” at the Lok Ma Chau Loop can serve the country’s development needs in face of the West’s economic sanctions.
Zheng Yongnian, a professor at the Chinese University of Hong Kong’s Shenzhen campus and board director of the Guangzhou Institute of the Greater Bay Area, made the call on Friday at a seminar focusing on the hub of top laboratories and research institutes.
While the State Council has proposed adopting some Hong Kong systems, including those for taxation and arbitration, on the Shenzhen side of the zone, the political scientist said the country needed to be bolder in the face of increasing economic hostility from the West.
“I personally feel that the development of the Loop project needs a more radical plan,” Zheng said in a pre-recorded speech.
The academic has widely been viewed as an economic adviser to the Chinese leadership since appearing at a symposium on economic and social work chaired by President Xi Jinping in 2020. He is also a member in the Chief Executive’s Policy Group formed last May.
Zheng also told the forum that while Hengqin, Qianhai and Nansha, the three existing and much larger areas designed to promote cross-border economic integration in the Greater Bay Area, were “rather competitive”, their effect so far “is still quite far from what we expected”.
“Reforms bit by bit can no longer meet the needs of the development of the Guangdong, Hong Kong and Macau Greater Bay Area, and cannot meet the development needs of our country,” he said.
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Lok Ma Chau loop: an overview
The bay area is Beijing’s plan to turn 11 southern cities into an economic powerhouse to rival areas such as Silicon Valley.
Zheng said the Loop offered Shenzhen and Hong Kong a chance to kick start “radical reforms”, and as a first step he advised, Hong Kong’s internationally aligned rules and standards should be more extensively applied over the border.
“The problems of Hong Kong in recent years have mostly been political, and its rules and standards are not having any problems,” he said. “The Lok Ma Chau Loop should align itself with Hong Kong rules.”
Hong Kong, Shenzhen border zone blueprint hopes to offer best of both worlds
He also proposed that in addition to innovation industries such as artificial intelligence, the new zone must incorporate the financial sector, because it was one of Hong Kong’s strengths that no mainland city could replace.
A plan for the Loop released by the State Council last year mentioned applications of technologies for the financial sector including a “supercomputing cluster”, but did not explicitly say that traditional finance services such as banking and wealth management should be included.
Former city leader Leung Chun-ying, who spoke at the event, agreed there could be more rule alignment between Hong Kong and the mainland, saying the city should continue to play the role it did during the country’s reform and opening-up period in the 1980s.
“We need to have a clear head about what our unique advantage is, as it is a mandate given to us by the central government,” said Leung, who also serves as the vice-chairman of the Chinese People’s Political Consultative Conference, the nation’s top political advisory body.
“Being visa-free alone doesn’t make a place international,” he said. “The most important thing about internationalisation is the openness of people’s thinking and attitude, and the openness of policies, all of which are Hong Kong’s unique advantages.”
Drug giant AstraZeneca to open Hong Kong R&D centre by late 2024 at earliest
Leung also advised Hong Kong and Shenzhen to avoid duplicating infrastructure and even competition in developing the Loop, which he warned would not be a frictionless process given the two places’ differences in systems and even language.
The city’s technology minister Sun Dong said Hong Kong would have to consider how to better take advantage of its international advantages and appeal to global talent and capital, given that Shenzhen would have an “undeniable” cost advantage.
Part of the loop zone is currently occupied by makeshift quarantine and medical facilities built during the Covid-19 pandemic, although authorities are planning to empty the plot for development.
The first three buildings, including a residential block for researchers, are set to be completed later this year and among the first companies to move in will be drug giant AstraZeneca.
