Forty years ago, the visionary idea of using Shenzhen as a laboratory to explore the economic reform and opening-up of China was launched. That this has turned out to be an unmitigated economic success is unqualified proof that the vision that then-paramount leader Deng Xiaoping and his leadership team developed was not only the right one for China, but also for the whole world.
An economically prosperous China as a key player in the interconnected global economy has generated substantial economic opportunities worldwide. That the International Monetary Fund released its latest World Economic Outlook Report in which China is ranked the world’s largest economy in terms of purchasing power parity in the same week as the 40th anniversary celebrations in Shenzhen take place, seems highly appropriate.
In a keynote address marking the anniversary, President Xi Jinping said China’s first Special Economic Zone would accelerate the opening-up of the reform process and synchronize with the development of the Guangdong-Hong Kong-Macao Greater Bay Area. “Reform and opening-up must be moved forward at a higher level” through the integration of Hong Kong, Shenzhen, and Macao. This entails an area incorporating 73 million people, three different currencies, three different management systems, different official languages, and their mutually complementary strengths will act as one unit. While the resulting GBA represents only one percent of China’s landmass, this economic powerhouse represents more than 11 percent of China’s GDP at $1.68 trillion — or more than the GDP of Canada, Russia, or South Korea.
Some commentators have cast doubts about the future of Hong Kong after 2047 when China’s “no change” promise to the Hong Kong SAR would expire. The vision that President Xi has outlined makes it clear that Hong Kong will continue to be a global financial center because we have the know-how, talent pool, reputation, infrastructure, international connectivity, a trusted legal system, a track record as a leading financial center for IPOs and free capital movement. These attributes strongly ensure that Hong Kong will constitute a vital piece of the Bay Area puzzle. It is therefore logical to expect that not only the rest of the Bay Area, but also the rest of the country will continue to use Hong Kong as the main financial gateway to the world. The scores of leading mainland companies that continue to establish offices in Hong Kong, and use the Stock Exchange of Hong Kong as their listing venue, are a testament to the country’s confidence in Hong Kong. The Chinese mainland needs Hong Kong just as Hong Kong needs the rest of China. It is a symbiotic win-win relationship that is unlikely to change in the foreseeable future.
The GBA vision does not only benefit the financial sector in Hong Kong, but even more importantly it benefits ordinary Hong Kong residents. Hong Kong has long struggled with serious social issues which are largely related to the unaffordability of housing and the long wait for public housing. Part of the future GBA vision is to solve this problem by creating Hong Kong enclaves with Hong Kong-designed and built housing, medical facilities, schools and associated services, all of which to come under Hong Kong-styled administration and covered by the Hong Kong tax system. A historically appropriate area for this Hong Kong extension could be Nansha, an area in which the late Hong Kong entrepreneur and property tycoon Henry Fok Ying-tung invested heavily for over 25 years. If the inherent legal and regulatory obstacles could be overcome, this would significantly reduce the housing pressure that has been an oppressive economic and social overcast for at least the last two decades. Overcoming this housing conundrum is key to giving young Hong Kong people hope for a brighter future and greater social upward mobility and the confidence to start their own families. This has increasingly become an existential crisis as Hong Kong has been experiencing negative local population growth for some time.
President Xi explained his vision of more Hong Kong people working in other parts of the Bay Area. The clear declaration of this direction naturally means that the current regulatory and practical hurdles will slowly but surely disappear. Existing agreements between Hong Kong and the mainland are no longer adequate to facilitate the transfer of businesses, goods and services across the boundary in the expected exponentially growing volume. A new regime of cross-boundary cooperation will need to be prioritized, as the current Hong Kong unemployment rate and the changed post-COVID dynamics mean that Hong Kong can only grow as fast as before through closer integration with the Bay Area, taking advantage of its vast market.
The physical integration of residents from various parts of the Bay Area and beyond, whether working together or living together, will also contribute to closer mutual understanding. This is important as last year’s violent social unrest has exposed many young Hong Kong people’s general ignorance about their own country. Many have never even crossed the boundary into the mainland. Seeing the economic miracle, and the high quality of life up close will quickly dispel many of their negative preconceptions about the mainland. Mutual understanding cannot be achieved through internet or social media alone. There must be direct human interaction and the sharing of experiences for true understanding to take place.
So while congratulations and admiration are deserved for Shenzhen’s economic miracle of the last 40 years, it is the vision and opportunity of the next 40 years that will prove to be the game-changer to the current generation of young Hong Kong residents, provided they are willing to get out of their comfort zone, and grab this opportunity across the boundary with both hands and run with it.
The author is a Hong Kong-based specialist in international public law and an adviser on China-related matters to the private and public sectors.
The views do not necessarily reflect those of China Daily.
