Hong Kong still has a place in Beijing’s grand reform plans for Shenzhen

To stay at the forefront of China’s miraculous rise, Hong Kong has to identify its unique strengths and adapt. For example, the central government is forging ahead with the trial launch of a digital currency in Shenzhen, and Hong Kong can contribute

Ken Chu

Published: 6:00pm, 17 Oct 2020

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Four decades ago, Shenzhen was a fishing village just a stone’s throw away from Hong Kong. And not too long ago, the Shenzhen special economic zone was just known as China’s Silicon Valley. Now, however, its role and significance are set to expand dramatically.

According to a five-year plan issued by the Communist Party’s Central Committee and the State Council recently, Shenzhen will be the testing ground for further reforms. From now till 2025, the city has latitude in introducing reform measures across a range of sectors: city planning, education, finance, intellectual property legislation, labour, talent recruitment, shipping and technology.

It will relax restrictions on foreign companies seeking to enter traditionally sensitive sectors such as energy, technology and telecommunications. Furthermore, Shenzhen will aspire to be an international city by easing market access for foreign investors and helping foreign talent to work and live in the city. If all these measures are implemented successfully, it will transform Shenzhen.

Indeed, in his speech marking the 40th anniversary of the Shenzhen special economic zone, President Xi Jinping characterised this young metropolis as an important engine of the development of the Greater Bay Area, the nation’s most important strategic development plan, while tasking the city with becoming a world-class innovation powerhouse and model of further reforms.

In light of these developments, some may come to the easy conclusion that Hong Kong will be playing second fiddle to Shenzhen. However, Hong Kong’s importance to the nation continues to be recognised, as evidenced by the presence of key Hong Kong representatives at the ceremony on Wednesday. Retaining its core advantages, Hong Kong will need to muster the courage to adapt quickly to the new environment, seize the opportunities unfolding in China, foster closer ties, and aim to become one of the twin engines of growth, together with Shenzhen.

Within the system of a socialist economy, Shenzhen is set to spearhead reforms. While in the past decades Hong Kong has served as a model for the socialist system to evolve towards, realistically this role will weaken as reforms in the mainland progress.

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When China started modernising, no city on the mainland had the global connections, commercial acumen and experienced professionals on a par with Hong Kong’s. Therefore, it was natural for China to look upon this city as a beacon, if not a model, of modernisation.

However, the global economic and political landscape has since changed drastically. And so has China. Seeing the growing importance of innovation and technology to economic growth and transformation, China has promoted the technology sector and nurtured a handful of entrepreneurial and innovative start-ups, one of which is the Shenzhen-headquartered Tencent.

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In addition, China has blazed its own trail, pursuing market-oriented reforms with Chinese characteristics, despite an increasingly volatile global economic and political environment. This is also sending Shenzhen and Hong Kong on divergent paths of development.

Yet, time is on Hong Kong’s side. Shenzhen has demonstrated its ability to transform from a backwater into a hi-tech metropolis, and in this regard, it might well point the way forward for Hong Kong.

Understandably, for Hong Kong, it requires tremendous courage and effort to adapt to being at a crossroads between an international capitalist economy and a socialist economy with Chinese characteristics. The city must strengthen its footing not only in the Greater Bay Area but also with regard to the rest of the country.

To stay at the forefront of China’s miraculous rise, Hong Kong has to rethink its position and role, in order to identify its unique strengths and relevant opportunities around the Greater Bay Area. For example, the central government is forging ahead with the trial launch of a digital currency in Shenzhen, and then the Greater Bay Area. Given our dynamic cryptocurrency scene and solid regulations, Hong Kong can strive to play a role in the coming era of digital currency.

None of us in this city should feel pessimistic. Instead we should be energised to embrace the opportunities not only in Shenzhen but also in the rest of the country.

Ken Chu is group chairman and CEO of Mission Hills Group and a national committee member of the Chinese People’s Political Consultative Conference

This article appeared in the South China Morning Post print edition as: HK still has a role in Beijing’s grand plans for Shenzhen

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