As US-China trade war intensifies, Hong Kong faces rough ride on its way to becoming hi-tech research hub for Beijing’s Greater Bay Area project

Despite domestic troubles, city leader Carrie Lam managed to travel to bay area cities to seek more future cooperation
US and China are now at war over more than just tariffs, and a key battlefield is technology

Tammy Tam

Published: 1:55pm, 19 May 2019

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“Save for rainy days,” is an old Chinese saying that is a familiar concept in other cultures as well.

Government officials have regularly cited this philosophy for years when it comes to spending public funds, but they have been accused of crying wolf to justify their reluctance to roll out more cash relief measures in an affluent city with one of the worst wealth gaps in the world.

However, those rainy days may finally be here for real, just around the corner, as the US-China trade war intensifies. Its profound impact on Hong Kong may be felt on many fronts, including the challenge to the city’s role in Beijing’s Greater Bay Area megaproject.

The bay area blueprint aims to transform the country’s two special administrative regions, Hong Kong and Macau, along with nine cities in the Pearl River Delta, into China’s Silicon Valley. Hong Kong, as one of the leading cities, is expected to play a role as its hi-tech research and financial hub.

Carrie Lam with Guangdong province governor Ma Xingrui during her trip to the mainland. Photo: Handout

Two years into her term of office, Chief Executive Carrie Lam Cheng Yuet-ngor has a lot on her plate.

In addition to tackling various pressing livelihood matters, including runaway property prices, she now has to contend with a major political storm over her government’s contentious extradition bill, which has escalated into a sovereignty issue for Beijing as domestic and international opposition builds up.

The amended legislation would allow the transfer of fugitive criminal suspects between Hong Kong and those jurisdictions with which the city has no extradition agreement so far, including mainland China, Taiwan and Macau.

All her troubles, however, have not prevented Lam from building up momentum for Hong Kong to participate in the bay area project.

Over the past week, while Beijing’s top envoy in Hong Kong waded into the extradition debate by mobilising pro-establishment forces to back the bill, Lam made it clear she would stay the course, but she also managed to take four days out of her packed schedule for travelling to different bay area cities to seek more future cooperation.

Ideally, Hong Kong should be able to take up a strong niche position as a hi-tech research hub when it comes to the division of roles among different cities in the Greater Bay Area.

The world was waiting for an end to the deadlock in trade talks between Beijing and Washington – to no avail. Photo: AP

Under the “one country, two systems” policy, Hong Kong enjoys a free flow of information and capital, and boasts of world-class universities which have close ties with many prestigious overseas counterparts, including those in the US.

The city can also tap into its technology-driven neighbour Shenzhen, which houses Chinese tech giant Tencent and Huawei, the world’s leading telecom company, in addition to other start-ups.

Show sincerity or cancel trade talks, Chinese state media tells US

But the US and China are now at war over more than just tariffs, and a key battlefield is technology.

Just as the whole world was waiting with bated breath for an end to the deadlock in trade negotiations between Beijing and Washington, President Donald Trump upped the ante by issuing an executive order effectively blocking Huawei from doing any business, not just with the US, but with any American company worldwide on national security grounds.

Carrie Lam visited a number of mainland cities to seek more cooperation. Photo: SCMP

Losing access to American-made components and chips is unfortunate for Huawei’s supply chain, but fortunately the tech giant has revealed it has had a plan B for years to develop its own technology – now is the time to roll it out to maintain the safety and supply of Huawei’s products for its worldwide clients.

As for Hong Kong, given the deteriorating China-US relationship and the snowballing controversy over the extradition bill, which is strongly opposed by the US and its Western allies, the city is in for the roughest of rides on its way to becoming the bay area’s tech hub.

This article appeared in the South China Morning Post print edition as: Hong Kong faces stormy path to future

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