A win-win deal for HK, mainland

It is hoped the signing of a cooperation agreement between Hong Kong and the Chinese mainland, giving the city a specific role in the Belt and Road Initiative, will bring the city a dose of optimism.

Pessimism that Hong Kong is gradually being marginalized in both regional and national economic development has prevailed for quite a while. This mood was stoked up by the plain truth that regional economic rivals such as Singapore, Shenzhen and particularly Shanghai, which aspires to become one of the world’s top financial centers by 2020 through further opening-up and financial innovations, have overtaken Hong Kong economically in many respects. The city’s political squabbling in recent years has further fueled such pessimism.

The agreement signed by the two sides on Thursday, pledging the central government’s further support for and cooperation with Hong Kong in 26 ways under six key areas, has in effect reaffirmed Hong Kong’s relevance to and significance in the nation’s future development.

Cooperation under the Belt and Road Initiative in areas including finance and investment, infrastructure and maritime transport, economic and trade facilitation, Greater Bay Area development and dispute resolution will help Hong Kong make full play of its unique edge and boost its competitiveness, the National Development and Reform Commission suggested in a statement issued after Thursday’s signing ceremony. This is no doubt an uplifting message for a city that is increasingly concerned about its declining competitiveness.

And cooperation in areas such as the Guangdong-Hong Kong-Macao Greater Bay Area development will afford the city new room for further economic development and diversification. It has been a widely recognized fact that economic and social development in the city has been constrained by unfavorable factors such as a shortage of natural resources — particularly land — unsuccessful industrial upgrading and a narrow economic base. Participation in the Greater Bay Area project will help Hong Kong shatter those economic bottlenecks as the city’s economy is highly complementary with those of its partners in this project.

By catering to the various needs arising on the mainland from time to time, Hong Kong has reaped huge economic benefits over the past several decades, leading to its current economic prowess. The city’s economic development has been mainly driven by four pillar industries — trade and logistics, tourism, financial services and business and professional services — all of which have been underpinned by ever-growing demand from the mainland.

With the mainland further opening up, Hong Kong’s middleman role could diminish; mainland companies’ reliance on Hong Kong’s ports, logistic services and fundraising platforms could decline. Cooperation in areas under the Belt and Road Initiative will give the city new room it badly needs to further its economic development and diversification.