Carrie Lam inks deal setting out Hong Kong’s role in Beijing’s global development plan
Agreement will help city utilise its ‘unique edge’, boost competitiveness and explore ‘new room for developments’
Hong Kong’s leader Carrie Lam Cheng Yuet-ngor took the city’s involvement in Beijing’s “Belt and Road Initiative” to a new level on Thursday, signing an agreement with the mainland that set out the city’s role and strengths within China’s global trade strategy.
The agreement will also help Hong Kong better utilise its “unique edge” and boost its competitiveness, while allowing the city to “explore new room for developments”, according to a statement issued by the National Development and Reform Commission following the signing ceremony.
Lam, the city’s chief executive, signed the agreement after a 15-minute closed-door meeting with commission chief He Lifeng in Beijing on Thursday morning.
She was on the second day of her three-day maiden duty visit to Beijing, during which she is expected to meet President Xi Jinping and other state leaders to brief them on Hong Kong’s economic, social and political developments.
The visit comes at a time when Lam’s public approval rating has dropped to 55.7 points out of 100, the lowest since she became the city’s leader in July, according to the University of Hong Kong’s public opinion programme.
“[The agreement] focuses on finance and investment; infrastructure and maritime transport; economic and trade facilitation; people-to-people bonds; pushing forward the Greater Bay Area initiative; strengthening cooperation between the two sides and dispute resolution; among others,” a statement issued by commission after the ceremony said.
According to a copy of the agreement released by the Hong Kong government, Beijing will further cooperate with and support the city in 26 ways under those six areas.
A working mechanism will be set up to ensure that the directions set out in the agreement will be followed through. The mechanism, or joint conference, will consist of the commission, Beijing’s Hong Kong and Macau Affairs Office, and senior officials from Hong Kong. They will meet at least once a year.
Lam and He did not speak to reporters immediately after the ceremony. But in a statement released later, the chief executive said: “The measures [mentioned in the agreement] will help strengthen and bolster Hong Kong’s status as an international financial, shipping and trade centre ... We will seek to convene the first meeting of the joint conference next year.”
The commission’s statement also said that the mainland authorities supported “relevant parties” using Hong Kong as a financing platform for infrastructure building along the belt and road.
The arrangement will foster the green bond market in Hong Kong and bolster the city’s position as the global renminbi offshore market, which will help internationalise the renminbi.
Under the agreement, Hong Kong and the mainland will further cooperate in areas including airports, ports, railways and roads.
According to the commission’s statement, the agreement was signed to follow up on the president’s vision.
Under Xi, Beijing has been revamping its economic diplomacy with the launch of the modern-day Silk Road trade strategy. The initiative was launched in 2013 to promote the building of infrastructure projects in about 65 countries from Asia to Europe.
Last month, Hong Kong’s Secretary for Commerce and Economic Development Edward Yau Tang-wah visited Beijing to discuss the belt and road agreement with officials there.
He said at the time that the agreement would set out Hong Kong’s role and strengths in the trade strategy. But it would not contain specific details on what projects the city would be taking part in.
Dr David Wong Yau-kar, a Hong Kong business leader and deputy to China’s legislature, the National People’s Congress, said: “The agreement is truly remarkable in its support for Hong Kong, and it’s up to Hong Kong to capitalise on the opportunities.”
Dennis Ng Wang-pun, president-elect of the Chinese Manufacturers’ Association, one of the most influential business chambers in Hong Kong, said the agreement showed “Beijing’s determination” to let the city play an important role in the development strategy.
Ng hoped that through the joint conference between Hong Kong and Beijing authorities, the central government would help to resolve difficulties faced by the city’s business sector in belt and road countries.
“In areas such as infrastructural projects, there are lots of business opportunities for Hong Kong’s construction and financial industries … but when businesspeople try to invest in those countries, we realise that many of them are resistant to foreign capital,” he said.
“For example, it could take you a year to start a factory in Myanmar, and it would help us if the procedures could be simplified.”
In 2003, Hong Kong and Beijing signed a free-trade deal called the Closer Economic Partnership Arrangement (Cepa) and launched a working mechanism to bolster Hong Kong’s then-struggling economy. But critics said the economic benefits the city enjoyed under the free-trade pact seemed to be diminishing in recent years.
Ng believed that the agreement signed on Thursday will be different.
“The Belt and Road Initiative is a national policy that has been being implemented … and the services covered by the agreement, such as dispute resolution and financing, are also what Hong Kong is good at,” he said.
Ng said he hoped that Hong Kong’s business representatives and Beijing’s ministry of commerce could be included in the working mechanism under the agreement.
Liberal Party leader Felix Chung Kwok-pan, a legislator representing the city’s textiles and garment sector, hoped that the authorities would learn from the experience with Cepa and focus on countries with well-established trade ties with China.
“We should start with nations with free-trade pacts with us. For example, the Association of Southeast Asian Nations,” he said, referring to the 10 Asean member states.
Chung also said that under the agreement, mainland corporations will be providing the capital for foreign investment, while Hong Kong’s professional and legal services will play a vital role.
“The mainland has the money for many projects, but ... our independent judiciary and credible legal system are more easily recognised by foreign countries,” he said.
Separately on Thursday morning, Macau’s leader Fernando Chui Sai-on was seen entering the Hong Kong and Macau Affairs Office in Beijing. HKMAO director Zhang Xiaoming was seen greeting him at the office’s entrance.
While Chui met Zhang for about an hour, Carrie Lam met the director for two hours and 15 minutes behind closed doors.
Phila Siu is reporting from Beijing