HK-mainland’s symbiotic relationship

In another way to recognize Hong Kong’s contribution to the nation’s reform and opening-up over the past decades, the central government honored four Hong Kong celebrities — along with other 96 compatriots — by awarding them medal of “reform pioneer” at a grand gathering to mark the country’s 40 years of reform and opening-up in Beijing on Tuesday.

The four Hong Kong awardees fully deserve this honor for their outstanding contributions to the country’s development. But the honor is also shared by all Hong Kong people, whose collective contribution to the nation’s reform and opening-up has been a crucial part of the success of this process and the economic miracles the nation has created during this era.

Hong Kong entrepreneurs were among the first batch of overseas investors who, by injecting huge amount of capital as well as introducing advanced technologies and management skills, helped jump-start the manufacturing industry on the mainland, which eventually became the backbone of the nation’s economy and the engine of its miraculous growth for decades.

Hong Kong’s sophisticated financial markets, meanwhile, have provided a solid platform for mainland companies to raise the precious capital necessary for their early phase of development before they grew into corporate giants.

Of course, what Hong Kong has developed with the mainland is a mutually beneficial relationship. While the country as a whole has benefited tremendously from the strong cooperation between the two sides, Hong Kong has also reaped huge economic benefits from catering to the various needs arose on the mainland from time to time.

The city’s economic development has been mainly driven by four pillar industries, namely trading and logistics, tourism, financial services and business and professional services. Mainland demand has played a crucial role in the making of all of these pillar industries. Transshipment has become the backbone of Hong Kong’s trading and logistics sector, with re-exports from and to the mainland now accounting for 98 percent of the city’s overall export shipments. By providing a solid platform for mainland companies to raise international capital and for international investors to invest in the mainland economy, Hong Kong has secured a steady flow of business opportunities for its financial services sector. Mainland companies now account for over 60 percent of the total capitalization of the Hong Kong stock market. And strong demands for services from the manufacturing bases in southern China keep Hong Kong’s business and professional services sector busy all year round.

Hong Kong’s return to the motherland has further strengthened its role in national development. Under the “one country, two systems” arrangement, Hong Kong provides a reliable testing ground for the nation to test-run various financial reforms, including the internationalization of yuan and the opening-up of mainland capital markets through the Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and the Bond Connect.

The unique position of Hong Kong gives it an unrivalled advantage over its competitors such as Singapore, London and New York in serving the needs of the Chinese mainland arising from time to time as it pursues further reform and opening-up in future. The assurance, as reiterated by President Xi Jinping on Monday, that Hong Kong will continue to play a unique and irreplaceable role in the nation’s next round of reform in the new era is beyond any doubt.