By Tu Haiming

The Asia-Pacific Economic Cooperation (APEC), which concluded its 30th meeting last week in San Francisco, is an important platform for economies in the Asia-Pacific region to cooperate and strengthen multilateral economic ties.

As China’s economy gathers steam, the Hong Kong Special Administrative Region’s distinct advantage of enjoying the staunch support of the motherland while being closely connected to the world becomes increasingly apparent, which has made it a unique and important member of APEC. The latest APEC economic leaders’ meeting highlighted the city’s status and functions.

In spite of his hectic schedule, President Xi Jinping still found time to ask Financial Secretary Paul Chan Mo-po about the situation in Hong Kong, an indication of the importance he attaches to the city’s development.

Thanks to the special administrative region’s unique status in both the country and in the international arena, Hong Kong has a seat at APEC despite the fact that it is merely a city economy.

From the central government’s perspective, Hong Kong is the only Chinese territory that practices the common law system and is one of the few free economic ports in the world; as such, the city can play an pivotal role in the country’s drive for high-level opening-up and high-quality development.

Meanwhile, other APEC members recognize Hong Kong’s acclaimed advantages, such as its robust rule of law, its free flow of capital, talent, goods and information, and its convenient and safe access to the Chinese mainland.

In reporting to President Xi, Chan noted that the incumbent SAR government has adopted a governance philosophy that integrates a “proactive government” and a “highly efficient market”.

The “positive noninterventionism” approach practiced previously might work during economic upswings, but the economic slump would linger on without proactive government intervention during a downturn.

When Chief Executive John Lee Ka-chiu and his team assumed office in July last year, Hong Kong was struggling to shake off an economic slump in the aftermath of the COVID-19 pandemic, which had not only battered many local companies but also forced some foreign enterprises to exit from the city.

The grim economic landscape prompted the Lee administration to adopt a proactive approach and roll out all-encompassing measures to stimulate economic recovery.

First, measures were introduced to attract overseas businesses. From the end of December last year to the third quarter of this year, more than 30 “strategic enterprise partners” have set up business in Hong Kong, bringing in investments worth HK$30 billion ($3.85 billion) and creating 10,000 jobs. These enterprise partners not only established their presence in Hong Kong, but also pledged to bring in upstream and downstream businesses to create a thriving ecosystem and value chain in the city.

Second, programs were launched to trawl for talent. Since December last year, the SAR government has received a total of 180,000 applications under various talent admission programs, of which more than 110,000 have been approved. More than 70,000 of them have settled in Hong Kong, which is more than double the original target of 35,000.

Third, the SAR government has been scouting overseas opportunities since the beginning of this year. The chief executive has led two delegations to visit Saudi Arabia and the United Arab Emirates in the Middle East, and Singapore, Indonesia and Malaysia in Southeast Asia. These trips have resulted in a large number of cooperation pacts.

As China’s economy gathers steam, the Hong Kong Special Administrative Region’s distinct advantage of enjoying the staunch support of the motherland while being closely connected to the world becomes increasingly apparent, which has made it a unique and important member of APEC

Fourth, the SAR government has actively promoted and organized international events in the city. The Global Financial Leaders’ Investment Summit held earlier this month was attended by 300 financial heavyweights from around the world, which was an unprecedented turnout. Moreover, the decision by the Future Investment Initiative Institute, an organization run by Saudi Arabia’s sovereign fund, to organize an international forum in Hong Kong next month is further evidence of global recognition of Hong Kong’s status as an international financial center.

Fifth, Lee’s administration is making efforts to reach out to a global audience. The reduced presence of foreign businesspeople in Hong Kong, as a result of COVID-19, has contributed to a misunderstanding of the city. To set the record straight, Chan made use of his APEC meeting trip to explain to the global audience the real situation in Hong Kong and the opportunities the city offers, and to promote its talent and investment programs.

Thanks to the government’s proactive measures, the local economy has managed to reverse its downward trend, with the full-year GDP expected to grow more than 3 percent, which would be one of the highest rates among developed economies.

Notwithstanding its small economic size, Hong Kong remains significant to other APEC members.

First, the city provides an efficient and convenient financing platform that meets the financing needs of enterprises at home and abroad. It is reported that some of the investment bankers who moved to Singapore during the COVID-19 lockdown are returning to Hong Kong, as Singapore’s capital market is too small to meet the needs of the large investment banks. This is further evidence that Hong Kong maintains its edge and appeal.

Second, Hong Kong offers easy access to the Chinese mainland market, which boasts an economic size of $18 trillion, a population of 1.4 billion (including a 400 million-strong middle class), and an economic growth rate of about 5 percent.

By contrast, the European Union has a total economic size of $16.65 trillion, a population of 448 million and a meager economic growth rate of 1 percent. Hong Kong is widely perceived as the ideal channel to access the vast mainland market.

Third, Hong Kong is the first stopover for mainland enterprises planning to go global. The city’s open economy and alignment with international standards are recognized internationally. Its sophisticated professional services make it an ideal place for mainland enterprises to set up their regional headquarters and help them manage the risks as they expand globally. With the Chinese mainland having contributed more than 30 percent to global economic growth, it is expected to serve as a major engine of global economic recovery. Hong Kong can play a significant role in the process for sure.

During his inspection trip to Hong Kong in April, Xia Baolong, director of the Hong Kong and Macao Work Office of the CPC Central Committee, noted that Hong Kong is one of the freest and most open economies in the world with an excellent business environment, and is a signatory to more than 260 international pacts and a member of more than 30 intergovernmental organizations, which is a unique advantage that no other city can match.

For Hong Kong, while challenges and hurdles remain, its people have every reason to remain confident about the city’s future.

The author is vice-chairman of the Committee on Liaison with Hong Kong, Macao, Taiwan and Overseas Chinese of the National Committee of the Chinese People’s Political Consultative Conference, and chairman of the Hong Kong New Era Development Thinktank.

The views do not necessarily reflect those of Bauhinia Magazine.

Source: China Daily