Generation after generation has built Hong Kong into the international city it is today. But deputies at last month’s two NPC sessions pointed out that anxiety signs in the city reflflect that its economic power is fading and will depend, as always, on t
Hong Kong will lag behind in international competition if the people spend too much time fighting among themselves, Laura Cha, a Hong Kong deputy to the National People’s Congress and chairman of Financial Services Development Council, warns.
“The foundation of Hong Kong is our people. The government, the watchdogs, the business community and the media need to be united,” she told a group of reporters during the Beijing sessions, and her statement reflects the concern of many of the city’s deputies.
During the past year, the city saw many disputes breaking out, covering a whole spectrum of issues. Sentiments among local residents toward mainland tourists became heated. The never ending wrangling over universal suffrage for the CE election in 2017 appeared to be heading toward a disruptive confrontation.
“Hong Kong needs to examine itself. The ongoing discussion over universal suffrage has raised too many disputes that have cost the city a lot of opportunities,” Li Yinquan, Hong Kong NPC deputy and vice-president of China Merchants Group, told China Daily. “The local financial industry which is keen to seize every possible opportunity is worried that Hong Kong may have fallen behind the global competition.”
“It’s true that in a democratic society, all members may take part in the discussion and have their voices heard,” he added. “However, when it comes to decision making, everybody must be rational. Ultimately, compromise among all sectors is necessary in order to reach consensus.”
During the sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference held in Beijing from March 3 to 13, leading central government officials reiterated that the 2017 election of the HKSAR chief executive must be conducted in accordance to the Basic Law and the decisions of the National People’s Congress Standing Committee.
The opposition sees it differently. They continue to press on with their own agenda. The two sides are poles apart, leading to legislative disputes and innumerable protest rallies.
Inspired by “Occupy Wall Street”, the local version of “Occupy Central” plans mass protests to block the roads of the financial district, if the authorities do not accept
the opposition’s version of universal suffrage.
In the midst of the growing clamor, an announcement from Beijing at the end of February gave a jolt to Hong Kong people. The news was that China would assume chairmanship of Asia Pacific Economic Cooperation, and plans to hold the APEC Finance Ministers meeting at the Hong Kong Convention and Exhibition Center in September were abruptly cancelled. The meeting was rescheduled to Beijing to “facilitate logistical arrangements,” according to the official announcement.
Local officials denied any link between the announcement and threats by Occupy Central that could have disrupted the Hong Kong session. Many observers say that there is an unmistakable connection to the political agitation over Hong Kong’s political reforms.
“Hong Kong should acquire a sense of crisis,” said Fang Fang, Hong Kong CPPCC member. “The rule of law and social stability are necessary conditions for any financial center.”
“Too many movements such as the so-called ‘ Occupy Central’ will stagger Hong Kong and cast a shadow over its future prospects as an international financial center. The cancellation of the APEC Finance Minister Meeting is a typical example of the consequences.” Opportunity costs
“This is a huge loss for Hong Kong and a shameful one,” Fang said. “But as there could be so much chaos and drama in the pipeline, there was no choice for the central government. We can’t risk inviting distinguished guests from the Asia Pacific region to step into any such political agitation.” He added that if political unrest continues, Hong Kong may see more cancellations. “It may cost us more opportunities to host international events and conferences.”
“At the end of the day, it’s the Hong Kong people — particularly the professionals and the general public — who would have to bear all the consequences, as business would shrink and Hong Kong’s reputation as a financial center would be shaken.”
Fang pointed out that, though the city hears all kinds of noises, the middle class sees Hong Kong’s future clearly. “However they are the silent majority. We need these people to speak out, to make sure Hong Kong stands at the forefront in the new round of global competition.”
“I’m not sure whether the
It’s true that in a democratic society, all members may take part in the discussion and have their voices heard. However, when it comes to decision making, everybody must be rational. Ultimately, compromise among all sectors is necessary in order to reach consensus.” LI YINQUAN HONG KONG NPC DEPUTY AND VICE-PRESIDENT OF CHINA MERCHANTS GROUP
rescheduling of the APEC Finance Ministers’ Meeting is related to the political agitation in town. But I was concerned in the first place when I heard that Hong Kong was to host the event,” said Laura Cha. “People were talking so much about Occupy Central at the time. I wondered what would evolve when the curtain was due to rise on the meeting. I guess the SAR government was concerned, too, not to mention the central government. The financial sector is also watching the impact of these political actions — whether they will be peaceful or what.”
“There might not be as much impact on Hong Kong’s image as we feared, because the cancellation was issued so many months in advance. Many foreigners don’t know Hong Kong was to hold the meeting. After all, it’s better than the entire world seeing matters run out of control while the meeting is in progress,” she added.
“I urge everyone to work within the boundary and try not to go off on a tangent, which would bear no fruit because it would be outside the scope of the Basic Law,” said Henry Tang Ying-yen, CPPCC Standing Committee member and former chief secretary of Hong Kong. “I can’t see why anybody would choose to express themselves through illegal means while there are so many legal channels open to them. I don’t know how many disruptions they are going to create. But if they did so, those things will be handled in accordance with the law. I have confidence in our police force that they are able to maintain order.”
As voices on either side grow louder, Li of the China Merchants Group contends that the endless arguments and the unstable atmosphere are miring the city in mud in the ongoing competition with Singapore, Hong Kong’s perennial rival.
“Too many discussions have affected Hong Kong’s efficiency and made it go slow. A matter that could be settled in Singapore in a matter of months will be debated for years here. We will miss chances in this way. Society needs to put some thought into it,” he said, adding that when compared to Singapore, Hong Kong’s advantages appear to be waning.
“Singapore has an advantage to attract foreign financial business. It maintains good relationships with major economies, especially China. Besides, the city state is also friendly to talent, from well-educated and skilled workers to average laborers. Singapore has kept an open attitude to immigrants. In Hong Kong, it is quite to the contrary. Discrimination against mainland people appears from time to time. But as a competitive metropolitan center, the city needs to be more open and tolerant to different cultures,” he said. Central govt support
“I admire Singapore’s efficiency. But Hong Kong doesn’t need to look down on its own record,” Cha said. “This is a free market, where market share is what everyone should fight for. Our tie with the mainland is our strength. As part of China, our knowledge of the country is better than Singapore’s. What we need to do is make good use of this strength, instead of wasting time on topics that are not beneficial to the city.”
The central government continues to stand firm with Hong Kong. Premier Li Keqiang reiterated Beijing’s support at the closing press conference of the NPC on March 13.
“The comprehensive deepening of reform and economic upgrading of Chinese mainland will also open up tremendous space for Hong Kong’s development. The central government will continue to support Hong Kong in maintaining and elevating its status as an international financial, trading and shipping center,” the premier told the press briefing. “The mainland is opening up its service sector. In this field, Hong Kong has its strong leading edge. A pavilion that is close to a pond will reflect the moonlight first. With Hong Kong’s people and their enterprising spirit, I have confidence that Hong Kong will keep its competitive edge and maintain its prosperity amid future global competition.”
“We will do everything to benefit Hong Kong. That’s what we did in the past. And we will continue (to support Hong Kong) in the future,” Li added, when asked about favored policies for the SAR before he ended the press conference.
“The biggest potential for the economic cooperation between Hong Kong and mainland is in the service industry,” said Henry Tang, pointing out that the city will see bigger room to play on the mainland as the central government last year has announced to give market force the decisive role in the relocation of resources in the new round of economic reform.
He added that while within member economies of the Organization for Economic Co-operation and Development, service industries account for at least 70 percent of GDP, the share is only 46.1 percent on the mainland. In Hong Kong, 93 percent of GDP is contributed by the service sector.
“It may take the mainland a decade or two to reach the OECD average. There is great potential for us down the road,” he said. “Especially in financial services, professional and trade services, we have strong edge which will contribute to the development of the mainland as well as benefit ourselves.”
The financial industry is particularly excited about the offshore renminbi (RMB) business and progresses made in China’s (Shanghai) Pilot Free Trade Zone.
“Hong Kong is the biggest offshore RMB center. Shanghai FTZ provides a priority channel for cross border RMB flow. If we make good use of the zone, it will be very helpful to expand our offshore RMB pool. (Previously), it’s used to be a stagnant pool that people were not interested in. But now the sector has become more attractive as capital can (now) flow in and out of the mainland market,” said Fang.
“One thing we can do is to make good use of our talents and develop more yuan-related financial products. Based on a matured legal system, we should offer investor more reliable choices. We are longing to see the widening of the investment channels for offshore RMB, which will push forward the globalization of the currency.”
“We want to develop more RMBproducts. The Financial Services Development Council does not just talk the talk. The reports we delivered to the authority are pragmatic and detailed,” Cha said. “Some products involve policy changes on the mainland and approvals from the authorities. We expect to facilitate some products by year end.”
“Yuan internationalization is our great opportunity. But (the) challenge is also part of it,” she added. “We should focus on what we can do and (should not) worry about competition from others.” Contact the writer at email@example.com