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Heiwai Tang
Opinion
Heiwai Tang

How Hong Kong’s institutional strengths can power its 5-year plan

The ‘small government’ era is over. Hong Kong must proactively serve as a super value-adder connecting China and the world

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The Victoria Harbour waterfront in Hong Kong. The city must make full use of its institutional strengths in this increasingly fragmented environment. Photo: Reuters
Heiwai Tang
Heiwai Tang is professor of economics and associate director of both the Asia Global Institute and the Institute for China and Global Development at the University of Hong Kong.
Geopolitics is reshaping the global trade landscape. The old model of free trade is fracturing as nations retreat into protectionism. Yet, amid this shift, China’s economy remains remarkably resilient. The country is shedding its “world’s factory” label and becoming a technological powerhouse. A massive wave of Chinese enterprises is “going global”.
For Hong Kong, this is a defining moment. By drawing up a strategic five-year plan and leveraging its unique institutional advantages under “one country, two systems”, the city is poised to achieve its third economic transformation – following the first in the 1950s when the city began to industrialise, and the second beginning in the late 1970s when it transformed into a service-oriented economy.

Hong Kong must move beyond its traditional “small government, big market” mindset and proactively serve as a “super value-adder”, bridging China’s new industrialisation with the demands of the global market.

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It can certainly play a useful role in the emerging multipolar world. US protectionism is forcing enterprises to adopt “China plus one” and “US plus one” strategies to diversify production and mitigate over-reliance on a single consumer market. This reallocation of resources is fuelling fast-growing economies across Southeast Asia and the wider Global South.

Notably, far from hindering China’s emergence, US policies have accelerated the international expansion and high-end transformation of Chinese supply chains. Today, China wields significant global influence in artificial intelligence, advanced manufacturing and clean energy.

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In this increasingly fragmented environment, Hong Kong’s value shines. As a Chinese special administrative region underpinned by a common law system and aligned with international commercial norms, the city offers a stable and predictable environment, making it a trusted platform for a multipolar world.

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