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Hong Kong, Macau can grow China’s appeal in age of US containment
文章
2024 年 12 月 29 日
Hong Kong has plodded through another challenging year with some hits and misses. On the downside, economic growth is forecast to slow to 2.5 per cent. Financial Secretary Paul Chan Mo-po also expects the fiscal deficit to exceed HK$100 billion (US$12.8 billion). His admission drove home the fact that the government has, for all the clawbacks from the Housing Authority’s reserve and bond issuance, been effectively running a deficit since 2019.
This raises the alarm that Hong Kong could be facing a structural deficit, with heightened risks of a credit rating downgrade and attacks on the Hong Kong dollar. All eyes are on Chan’s next budget to see if he would take decisive action to return Hong Kong to fiscal health.
The good news is the government has met many of the work targets it has set to “grab” talent and attract strategic enterprises. Chief Executive John Lee Ka-chiu recently revealed that the number of offices in Hong Kong with parent companies elsewhere had increased by 10 per cent this year. Meanwhile, 66 strategic enterprises have set up shop in Hong Kong or are expanding their presence here, half of which are industry leaders. Hong Kong now boasts over 2,700 family offices.
Thanks to the admission of over 100,000 professionals under its talent schemes, Hong Kong’s population is back above 7.5 million, where it was before the relaxation of the immigration schemes of several Western countries led to a substantial brain drain.
Hong Kong’s ranking in various international surveys has improved. Hong Kong beat Singapore to regain the third position in the latest edition of the Global Financial Centres Index. Its competitiveness and talent rankings have also risen. These improvements show the government’s efforts in reinvigorating the economy have not gone unrecognised.
The Hang Seng Index also recovered. It bounced back in September and has been hovering at the 20,000-21,000 level with heavier trading, generating much-needed revenue for the government from stamp duties on stock transactions.
Since December 1, following the resumption of multiple-entry visit permits to Shenzhen residents, much larger crowds of tourists from mainland China are visible, adding to the city’s festive spirit and helping to lift the depressed retail sector.
The question is whether these efforts are sufficient to ensure Hong Kong’s economic security and global position when the “America first” Trump presidency seems hell-bent on expanding American power by weakening China and upturning the world order.
It is not clear whether the gathering of storm clouds was on President Xi Jinping’s mind when he met Lee earlier this month for the latter’s annual work report. In addition to praising Lee for accomplishing the historic feat of enacting local legislation to implement Article 23 of the Basic Law and resolving housing, public health and other livelihood problems, the official press release issued after the meeting was noteworthy for embedding in the text high expectations of Lee in leading Hong Kong in support of China’s next stage of development.
For the first time, Lee was praised for having “strengthened external exchanges and cooperation, and continuously enhanced Hong Kong’s international prestige”. Lee was also urged to “double down on reform” – a message previously sent by Xia Baolong, director of the Hong Kong and Macau Affairs Office, during his meeting last month with Hong Kong business leaders – and to “create new economic momentum and advantages”.
Similar messages were repeated in Xi’s keynote speech in Macau on December 20 to celebrate the 25th anniversary of Macau’s reunification and the installation of the sixth-term chief executive, but with greater clarity and urgency.
Macau was also praised for “greatly enhancing its international influence” and urged to “double down on reform”. Both Hong Kong and Macau need to diversify their economies and are seen as having a role to play in enhancing China’s influence through their Western heritage and connectivity.
Particularly significant is Xi’s repeated affirmation of “one country, two systems” as a “good system” that should be firmly adhered to. He also spelled out four principles for ensuring its continued success. The first is recognition of the country as the bedrock of the system and its distinct advantages, a dictum much reiterated in the past.
Secondly, both Hong Kong Macau are urged to maintain a high standard of national security and achieve “high quality” development.
Thirdly, a new point was made, which is now placed on the front burner – to “strengthen internal and external connections, adopting a more open and inclusive attitude to extensively develop international relations, raise international influence and appeal”, and “better play a bridging role in the latest configuration of the country’s scheme of development”.
Finally, Hong Kong and Macau are to spread the core Chinese values of tolerance and harmony, and promote the diversity and convergence of different cultures.
The first two points have been repeated often but the other two, with their new emphasis on international influence and the promotion of Chinese values, are significant additions to the tasks given to the two special administrative regions.
Beijing knows it is entering an age of make-or-break competition with the United States. President-elect Donald Trump seems poised to enter the White House armed with plans to throttle China’s growth. International connectivity is seen as being as critical as ever. For China to break out of a US-led containment, both Hong Kong and Macau have a pivotal role to play to bridge divides.
The official responses from both cities provide few clues of their recognition of this new mission. But Hong Kong has always lived by its connectivity and openness, and the business, academic and political leaders are ready to play their part.
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