HK must play pioneering role in further opening-up
Zhou Bajun says the SAR government should align its economic, livelihood and social interests with the national strategy of economic liberalization
The first China International Import Expo being held now in Shanghai is an important move to fully open up its markets since the conclusion of the 19th National Congress of the Communist Party of China. The fact that Shanghai is chosen as the host city reflects its status as the largest economic hub on the Chinese mainland.
The international community fully recognizes that Shanghai is standing at the forefront of the country’s reform and opening-up. Since the beginning of this year, two multinational corporations from the West have already set up new factories in Shanghai in the form of sole proprietorship.
On May 10, Tesla, a US-based company specialized in electric vehicles, obtained an operating license from Shanghai Pudong New Area Market Supervision Administration.
On Oct 27, Swiss industrial giant ABB Group announced that it will invest $150 million in China to build its largest and most sophisticated flexible robot factory in the world. The new facility, which employs robots to manufacture its brethren, will be located adjacent to ABB’s existing robotics industrial park in Kangqiao, Shanghai. It uses networked digital technologies, including its own ABB Ability Solution, leading collaborative robot technology and innovative artificial intelligence research to create its state-of-the-art “plant of the future”. This environmentally friendly factory is expected to be in operation by the end of 2020.
When the US Trump administration waged a trade war against China in an attempt to dissociate itself from the Chinese economy, foresighted multinational corporations, which include some American companies, did the opposite in order to tap into the world’s largest consumer market of 1.4 billion people. For instance, China is not only the largest consumer and importer of automobiles, but is also the biggest consumer market for robots, with one-third of the world’s production sold to China in 2017. That Trump administration imposing tariffs on Chinese products has prompted technology-related multinational corporations to expedite the scale of investment in China. Their moves are in step with China’s policy to further open up its market.
Granting multinational corporations access to the domestic market is just one part of China’s opening-up strategy; facilitating the collaboration between Chinese and Western enterprises in developing third-party markets is the other part. On Oct 26, the Chinese and Japanese governments held a China-Japan Third-Party Market Cooperation Forum in Beijing, in which more than 50 agreements with a total value of greater than $18 billion were signed. Local governments, financial institutions and enterprises from the two countries will work together in developing third markets. Some projects include: the JFE Engineering Corporation and some other firms from Japan joining hands with Chinese enterprises to promote smart city projects in Thailand; ITOCHU Corporation collaborating with CITIC Group to expand investment in offshore wind power projects in Germany; Fujitsu teaming up with Chinese enterprises to launch IT services for the elderly market; the Japan Bank for International Cooperation establishing a collaborative framework with China’s national financial institute China Development Bank to jointly provide loans for infrastructure projects in third-party markets.
China previously partnered with a few countries in developing third-party markets. For example, China and France jointly built a nuclear power plant at Hinkley Point C in the United Kingdom. This, however, is merely a single project and far from comparable to the scale, quantity and scope of this Sino-Japanese collaboration, which has set an example demonstrating to the world that China is open to collaborating with other countries to create a win-win game of developing third markets.
Hong Kong has played an irreplaceable role in the country’s reform and opening-up over the first 40 years of the process, with numerous Hong Kong enterprises investing in the mainland as pioneers. Now the country is at the juncture of further opening its domestic market, the SAR government, the local community and private enterprises should again actively participate in the process and serve as the forerunners.
The SAR government should align its local economic, livelihood and social interests with the national strategy of further opening-up and incorporate Hong Kong’s development into the national development strategy. Hong Kong is a highly open economy; it therefore cannot work on its own. We should resolutely refute the opposition camp’s unwarranted criticism of the chief executive’s 2018 Policy Address. On the other hand, the SAR government will need to adopt a macro perspective on governance. This means putting the miniature context of Hong Kong into the holistic framework of the country.
Some people noted that the city’s economic and livelihood issues fall within the scope of “Hong Kong people ruling Hong Kong” and the high degree of autonomy, as stipulated in the Basic Law. The central government fully acknowledges the high degree of autonomy of the SAR in this respect. However, this does not imply that the central government cannot have full jurisdiction over these issues. Firstly, as the city is undergoing economic integration with the mainland, its major economic and livelihood issues will be closely associated with the mainland and therefore they will have to be handled under the coordination of the central government. Secondly, changes in the land and water area of the SAR are matters under the central government’s jurisdiction and must be submitted to the central government for approval.