City can aspire for significant status in national development

This year marks the 40th anniversary of the economic reform and opening-up of the Chinese mainland. There has been an abundance of literature from both the SAR government and the public that re-examines and commemorates this event.

However, apart from reviewing the past, Hong Kong should look forward to finding its new role in the country’s further development and consider what it should do in future to synchronize itself with the pace of the country’s development in the new era.

First of all, Hong Kong should realize the significance of and actively participate in the Guangdong-Hong Kong-Macao Greater Bay Area initiative — a major national strategy for development.

While no official plan has been unveiled so far, the central government’s determination to develop Hong Kong, Macao and Guangdong under the Bay Area strategy has been made extremely clear. According to the agreement entered into between the National Development and Reform Commission and the governments of Hong Kong SAR, Macao SAR and Guangdong province on July 1, the city cluster should contribute to the all-round development of the country and Guangdong should strengthen itself as a pioneer in the process of the country’s further reform and development. That means Hong Kong and the Bay Area as a whole have an important role to play in facilitating policy innovations and breakthroughs.

To that end, both sides should work hard to strengthen interconnectivity by facilitating the cross-boundary flow of people, capital and information.

Both the Guangzhou-Shenzhen-Hong Kong Express Rail Link and Hong Kong-Zhuhai-Macao Bridge will build a convenient physical connection between the cities in the Bay Area. Meanwhile, the central government has already set forth examples of adopting innovative policies to promote connectivity, such as allowing Hong Kong tertiary institutions to apply for Central Scientific Research Fund and the issuance of mainland resident permit for Hong Kong, Macao and Taiwan residents. Hong Kong should also take the initiative to implement policies to facilitate interconnectivity.

The flow of people among cities is the most crucial element of connectivity. Only with a free flow of people among the partner cities can there be continuous flow of materials, capital and information. The Hong Kong government’s move to attract talents in 11 important areas of economic development under the recently announced Hong Kong Talents List is certainly a correct step. However, this new policy only offers immigration benefits. To attract overseas talents, Hong Kong need to offer more benefits such as providing tax concessions, extending the permissible stay of their spouses and parents and providing corporate tax concessions which may encourage companies to increase wage and housing benefits.

Hong Kong, an international financial center, can secure a more significant role in the Bay Area by also becoming an innovation and technology hub, a strategy endorsed by the central government, as President Xi Jinping expressly pointed out in May. The city is in a good position to become an innovation and technology hub as it possesses a sound legal system. This provides strong protection for intellectual property rights, and offers a complete range of professional, testing and certifying services.

Xi urged Hong Kong and its partner cities to make full use of their own strengths in the Bay Area development. This essentially suggests that Hong Kong should strive to become the research center that serves production and manufacturing activities in other partner cities. It can also specialize in intellectual property protection, technological transfer and export and fundraising. Such an arrangement would ensure that the fruits of research could be swiftly and successfully commercialized in the mainland and overseas markets, benefitting all partners.

Guangdong has been a leader in the development of the mainland’s socialist market economy since the start of economic reform and openingup, while the SAR is the world’s freest capitalist economy. It is safe to assume that the Bay Area will be a role model for China’s pursuit of high-quality economic development. Hong Kong, with a better business environment, should do more to help strengthen the vitality of private businesses on the mainland by encouraging other partner mainland cities to liberalize their markets, enhancing their protection of intellectual property and incentivizing technological innovation in the private sector. Ultimately, Hong Kong would benefit from the development of the mainland’s private sector.

The Bay Area project provides an effective way for Hong Kong to integrate its economic development with the national development and benefit from it. By actively participating in the city cluster development, the city will put its core strengths to full use while meeting the country’s needs. But for the city to play a significant role in the Bay Area development, both the SAR government and the private sector should adopt innovative thinking.