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THE OPPORTUNITIES FOR

HONG KONG IN THE PROCESS OF CHINESE MODERNIZATION

Zheng Yanxiong

Director of the Liaison Office of the Central People's Government

in the Hong Kong Special Administrative Region

(April 17, 2023)

Dear Chief Executive Mr John Lee,

Distinguished guests and friends:

Good afternoon! I am pleased to attend the “International Forum on Progress through Collaboration-Connecting the World: Hong Kong’s New Opportunities and New Future” Forum. First of all, on behalf of the Liaison Office of the Central People’s Government in the Hong Kong Special Administrative Region, I would like to extend my warm congratulations to the forum and sincere greetings to both online and offline participants!

At the 20th National Congress of the Communist Party of China held last year, President Xi Jinping outlined and thoroughly elaborated the theory of Chinese modernization, which is a major theoretical innovation of the 20th National Congress, the latest major achievement of scientific socialism, and the crystallization of experience in advancing the rejuvenation of the Chinese nation on all fronts through Chinese modernization. During this period of time, the “Chinese modernization” has not only become a frequently mentioned buzzword in Hong Kong, but also attracted extensive attention from the international community.

Distinguished from the modernization path already taken by the West, Chinese modernization explores a new modernization path that does not require expansion and war, does not require polarization, does not require developing the economy at the cost of the environment, does not require falling into the middle-income trap, does not require abandoning the pursuit of noble spirit, but rather, promoting the modern multiplication of population. The five “does not” and one “multiplication” is a typical replacement of the modernization model, which will definitely develop a new form of human advancement.

In the face of such a major historic event, what kind of opportunities are presented to Hong Kong? How should it be addressed? We can find the answer from President Xi Jinping’s many important speeches. On one hand, President Xi placed great emphasis on the opportunities for the world in Chinese modernization, stressing that we will promote overall human progress with Chinese modernization, strive to create new opportunities for the world with China’s new development, with a view to providing more stability and certainty to a turbulent world. It is underlined that China is willing to share the new opportunities brought by Chinese modernization with all countries in the world. These important expositions fully demonstrate that Chinese modernization will not only benefit China and its people, but also provide a strong impetus to promoting the recovery and development of the world economy and solving global governance problems. On the other hand, President Xi has placed great emphasis on the opportunities for Hong Kong in Chinese modernization. He stressed that the long-term prosperity and stability of Hong Kong and Macao special administrative regions is indispensable to the building of a great China. He also stressed that China’s national rejuvenation has become a historic inevitability, and the successful practice of “one country, two systems” in Hong Kong is an important part of this historic process. Hong Kong will certainly be able to make new and greater contributions to the China’s national rejuvenation.

During his inspection tour of Guangdong, President Xi once again emphasized the need to make the Guangdong-Hong Kong-Macao Greater Bay Area a strategic node for the new development pattern, a demonstration area for high-quality development and a pioneering area for the Chinese path to modernization. These important expositions fully demonstrate that, in Chinese modernization, Hong Kong has the potential to be the leading and pioneering region in the country, as well as a super-connector and super-importer for countries and places around the world to share the opportunities of Chinese modernization. This means that Hong Kong will have unique advantages and surging business opportunities in the future.

Hong Kong has historically been an important window for China to connect the world, and an important channel for countries around the world to share in the dividends of China’s development. On this new journey of promoting Chinese modernization, the Central Government has granted Hong Kong an even more important role and mission than before, elevating the prominence of Hong Kong’s unique position and advantages.

This means that Hong Kong, in the process of the building of a great China and China’s national rejuvenation, will continue to assume an important function in connecting China to the world, has the capacity of and should be spearheading China’s modernization; this also means that Hong Kong will comprehensively benefit from Chinese modernization and in the process of polishing old titles and forging new ones, will further enhance its international competitiveness; this also means that international enterprises and investors that invest and set up businesses in Hong Kong have seized a “windfall” of the times, ushering in a historic opportunity to share the dividends of Chinese modernization through Hong Kong.

I will use this opportunity to share four points with everyone.

First, Hong Kong’s significant advantage of being “backed by the motherland and connected to the world” will be further emphasized and enhanced as China promotes high-standard opening up to the outside world. Hong Kong is the only international metropolis in China that integrates international finance, shipping, trading and international aviation hubs. It is also China’s largest source of foreign direct investment, the largest recipient of foreign direct investment, and mainland’s largest offshore investment and financing platform. By the end of 2022, the mainland had utilized a cumulative total of 1.57 trillion USD from Hong Kong, accounting for 55.9% of the total foreign direct investment. The mainland’s investment in Hong Kong amounted to 1.6 trillion USD, comprising 56% of the total stock of outbound investments. These figures vividly illustrate the significance of Hong Kong as a “super-connector” between the mainland and the world.

Throughout the journey of Chinese modernization, China will open its door even wider, providing Hong Kong with an even more extensive role. The Central Government fully supports Hong Kong in seizing the historic opportunities arising from national development, actively integrating with the 14th Five-Year Plan, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Belt and Road Initiative, among other national strategies. The Central Government also completely supports Hong Kong in carrying out more extensive exchanges and close cooperation with the rest of the world. Looking ahead, Hong Kong will not only continue to play a crucial role in attracting foreign investment and technology but will also further act as a pivot point for mainland enterprises going abroad. Not only will Hong Kong continue to consolidate and develop economic and trade relations with developed economies, but it will also further enhance cooperation with emerging economies. Not only will it continue to maintain its hard power as an international capital powerhouse, but it will also further fortify its soft power as a hub for international talent. With a firm direction under Chinese modernization, Hong Kong being the “super connector” along the journey will experience a historic elevation in status, function, and advantage.

Second, Hong Kong’s significant advantage of the rule of law environment will be further emphasized and enhanced in serving Hong Kong, the Mainland, and the world. Hong Kong has a solid foundation through the rule of law and outstanding legal talents, and the rule of law is highly regarded internationally. Its sound legal foundation laid a cornerstone for maintaining and developing a premium business environment. In the face of the social unrest caused by the amendment bill, the promulgation of the Hong Kong National Security Law not only safeguards national security and citizens’ well-being, but also effectively protects the legitimate rights and interests of foreign investors. In the 2022 World Justice Project Rule of Law Index, Hong Kong ranks 22nd, surpassing many big countries that often condemn others.

The rule of law is the essence of Chinese modernisation. The Central Government has always adhered to the rule of law in Hong Kong. Hong Kong’s rule of law environment and its open and standardised business environment will only get better and better. Hong Kong’s sound rule of law can provide useful reference for the construction of the Mainland’s rule of law in the international community, and for mainland enterprises to connect with the international market. The Central Government fully supports Hong Kong in maintaining the Common Law system and maintaining close connection with the world’s prevailing rule of law governance and market systems, which enables Hong Kong to assist the Mainland in expanding exchanges and deepening cooperation with the rest of the world, as well as to play irreplaceable and pivotal role in connection between the Common Law system and the Civil Law system. Hong Kong’s esteemed rule of law can also facilitate foreign investors to resolve commercial disputes and arguments. Hong Kong has a well-developed international commercial arbitration service industry. The “14th Five-Year Plan” proposed supporting Hong Kong in building an international legal and dispute resolution service centre in the Asia-Pacific region. Recently, with the support of the Central Government, the International Organization for Mediation (IOMed) Preparatory Office was established in Hong Kong and serves to make great achievements in international legal services. All these indicate that China’s modernisation will offer more and more international public goods to different countries, and that Hong Kong’s rule of law can surely take on the task and benefit the world and Hong Kong.

Third, Hong Kong’s significant advantage as an international financial centre will be further emphasized and enhanced throughout the process of RMB internationalization. Hong Kong is among the world's top three financial centres. In the recently concluded March, Hong Kong hosted prestigious financial events such as the Basel Committee on Banking Supervision meeting and the Wealth for Good in Hong Kong summit. In the latest Global Financial Centres Index report, Hong Kong’s business environment, infrastructure, financial industry development, reputation, and overall ranking have all risen. These accomplishments fully demonstrate the resilience and strength of Hong Kong as an international financial centre.

Throughout China’s modernization, global finance will increasingly play a role in China, and China’s financial sector will likewise continue to expand its presence worldwide, especially as the orderly advancement of RMB internationalization brings significant opportunities for the development of Hong Kong’s financial industry. Looking ahead, as the world’s largest offshore RMB centre, Hong Kong is well-positioned to play a greater role in the internationalization of RMB by virtue of its mature experience, first-mover advantage, and favourable conditions within the “One Country” framework, through enriching and improving its product system, enhancing the functions of investment and financing vehicles, expanding the depth of the market, strengthening infrastructure construction and promoting cross-border usage. As a result, the golden signboard of Hong Kong’s international financial centre will shine brighter and more brilliantly.

Fourth, Hong Kong’s significant advantage of cultural diversity will be further emphasized and enhanced in the cultural exchanges and mutual learning between the East and the West. Hong Kong is a blend of Eastern and Western cultures and is a melting pot of Chinese cultural forms with Hong Kong characteristics. Since Hong Kong has returned to normal, there have been various international cultural and sports events, vividly demonstrating the unique charm of multicultural integration. The Hong Kong that everyone is familiar with is back and lively. Chinese modernization is committed to promoting the building of a community with a shared future for mankind, and Hong Kong’s style and charm are the best illustrations of the symbiosis of the “two systems”, the fusion of Eastern and Western cultures, and the global community of shared future.

From a broader perspective, as the junction of continental and maritime civilizations, the intersection of Chinese and Western cultures, the symbiosis of Western institutional solutions and solutions of Chinese characteristics, the concentrated area of economic hub and the cultural exchange, the Guangdong-Hong Kong-Macao Greater Bay Area has provided Hong Kong with unparalleled geographical advantages and cultural heritage to strengthen Hong Kong’s cultural creativity and radiation. Cultural tolerance is most conducive to gathering worldwide talents and attracting worldwide investors, consumers, and creators. Looking forward to the future, Hong Kong should maintain its characteristics of the fusion of Eastern and Western cultures, keep the horse running, dancing, investing in stocks, speaking foreign languages, and having foreign names, to take the road of internationalization. At the same time, Hong Kong should make good use of advantages such as well-known cultural exchange platforms and “cultural IPs” to better tell China’s stories to the world and enhance the power and influence of Chinese culture. This will surely further demonstrate Hong Kong’s value and commitment in promoting cultural exchanges between the East and the West, mutual learning between civilizations, and people-to-people bond.

Seizing major opportunities require being at the right time, the right place, answering the call of the times and riding on the trend of the times. We firmly believe that peaceful development and win-win cooperation are such a call of the times; the Chinese modernization is such a trend of the times; Hong Kong is such a right place; Hong Kong’s new stage in which it has restored order and is set to thrive is such a right time.

Distinguished guests and friends,

President Xi Jinping has profoundly pointed out that there is no reason for us to change such a good policy of “one country, two systems”, and we must adhere to it in the long run. Among the many advantages of Hong Kong, the biggest and most fundamental advantage is “one country, two systems”, and ensuring “one country, two systems” advances in a sound and sustained manner is a vivid interpretation and powerful assistance to Chinese modernization. Regardless of how the times and global landscape changes, our steadfast adherence to “one country, two systems” is unwavering, our confidence in maintaining Hong Kong’s long-term prosperity and stability is unwavering, and our determination to support Hong Kong in maintaining its unique status and advantages is unwavering. We sincerely hope that you will experience the new changes, new development and new atmosphere of Hong Kong in recent years, and truly make Hong Kong’s voice heard and showcase Hong Kong to the world. As the office set up in Hong Kong by the Central Government, the Liaison Office of the Central People’s Government in the Hong Kong Special Administrative Region will strive to play the role of a super connector and a super orderly, to support Hong Kong to better connect the world and better develop during the process of Chinese modernization, and to write a new and more splendid chapter.

Lastly, I wish the Forum a great success!

Thank you.

(This article was published in the May 2023 issue of Bauhinia Magazine)