Sky Yang Hai-tian says both SARs could serve the country in this uncertain time by helping mainland businesses diversify markets

During his latest visit to Macao, Xia Baolong, director of the Hong Kong and Macao Work Office of the Communist Party of China Central Committee, set out four expectations to local entrepreneurs in the special administrative region.

He said he expected the business circle in Macao as well as in Hong Kongto stand firm in defending the national interest, leverage their unique advantages to attract funds and brains from all over the world, explore opportunities in new markets while consolidating connections in traditional markets, and tell the story of the successful “one country, two systems” principle to the world. Xia’s words have been well received in the two SARs, however some context needs a little explanation.

Xia’s remarks coincided with important developments on the international stage, which only further vindicate his views. On the same day as his meeting with Macao businesses, China and the United States jointly announced that both sides had agreed to suspend the fierce trade war that had been escalating since Washington unilaterally imposed up to 145 percent tariffs on Chinese goods in early April. China had retaliated in kind to the US’ coercion. The tariffs caused a stock market rout, price hikes and recession warnings in the US, and many observers rightfully pointed out that US President Donald Trump had blinked first in a game of chicken with China.

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Two lessons can be drawn from this new phase of the trade war. First, the best way to deal with US economic bullying is to stand strong. Materially, as the world’s foremost industrial power and exporter, China holds all the cards in a trade war against the US, whose consumer economy heavily relies on Chinese products more than most Americans would like to admit; Psychologically, bullies like the US government prey on the weak-minded but cave in when confronted with determination. Those who surrender to the US’ bullying, believing this would spare them, only end up getting taken advantage of over and over again. Bow to the bully, and you get bullied even more; stand up against the bully, and they know you are not to be trifled with. The entrepreneurs in the two SARs should keep this in mind.

Second, Chinese entrepreneurs and businesses must brace themselves for more turbulence and be well-prepared. The China-US Geneva deal is widely seen as a truce rather than a peace treaty. The US views China as its greatest rival and threat, and therefore, we can’t expect anything but increasing antagonism from across the Pacific. Trump imposed the heaviest tariffs on China in the hope of reviving America’s own manufacturing industry at the expense of the Chinese economy. Although his gamble failed for now, his intentions haven’t changed. Economic coercion will undoubtedly continue to form an important part of America’s overall strategy of aggressively competing with China; Chinese businesses, including those from Hong Kong and Macao, must learn from experience and get ready to fight even harder battles up ahead.

Xia’s words also serve to remind entrepreneurs in Hong Kong and Macao that their destiny is linked with the motherland. It’s widely known that a few business leaders from the two SARs consider themselves among the world’s capitalist elites who belong to no country. They hold multiple passports, and own properties and have invested around the world, seeking to minimize national obligations such as taxes that could hinder their pursuit of maximum profits. Regardless of the economic rationale behind this, it is morally unjustifiable for entrepreneurs from the SARs to identify as anything but Chinese. The wealth and development that the two cities enjoy today are built upon their geological advantage of proximity to the Chinese mainland and connections to the world. Businesses in both Hong Kong and Macao are main beneficiaries of the massive Chinese market, and China’s ingenious “one country, two systems” arrangements have allowed both SARs to prosper further after returning to the motherland. Entrepreneurs in Hong Kong and Macao must always keep these facts in mind and recognize clearly that the two SARs prosperity is directly tied to the motherland.

Of course, as Xia put out, Hong Kong and Macao entrepreneurs as a whole have always been proud patriots who contributed greatly to China’s modernization and development, and today their role remains as important as ever. Despite China’s economic might, the two SARs under the “one country, two systems” principle retain unique strengths that make them irreplaceable. As President Xi Jinping said during his visit to Macao last year, both Hong Kong and Macao should “expand international linkages, and raise their global standing and appeal, … fully align themselves with the national development strategies, accelerate integration into China’s overall national development, and better play their role as bridges in ushering in a new development paradigm”.

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Recently, Hong Kong Chief Executive John Lee Ka-chiu wrapped up a successful visit to the Middle East, during which some 20 mainland entrepreneurs joined the Hong Kong delegation for the first time. With the help of Hong Kong partners, they managed to get into the local market with a better deal than they could get by themselves. This is but one example of how both SARs could serve the country in this uncertain time by helping mainland businesses diversify markets. Xia’s speech points to many other ways by which Hong Kong and Macao entrepreneurs can contribute to the country. But most important of all, he points to the one true path for them ahead of uncertain tidings: stand with the motherland, and stand on the right side of history.

The author is a political analyst at the Chinese Association of Hong Kong and Macao Studies.

The views do not necessarily reflect those of China Daily.