As Hong Kong strategises for success, it should celebrate its uniqueness

Reform featured prominently in Hong Kong Chief Executive John Lee Ka-chiu’s recent policy address. Amid the challenging economic headwinds and intensifying geopolitical competition between China and the West, the acknowledgement that Hong Kong must change its strategy is very welcome. Bold transformation requires an understanding of our city’s unique strengths and weaknesses. To paraphrase Lee, we can always learn from others’ experiences but a wholesale replication would be ineffective, even counterproductive. The key to reform lies in an understanding that, while being a part of “one country” grants us immense market access and strategic heft internationally, it is the distinctions between the “two systems” that render us truly competitive. These distinctions include the free flow of information, capital and personnel long instrumental to our success, but also the more robust freedoms of speech, rule of law and academic debate that shed light on the pluralism and nuances of the Chinese political system. Not only must these contrasts be preserved – they must be sharpened and celebrated. We should begin with our financial sector. The pledge to boost yuan-denominated investment products highlights our role in expediting yuan internationalisation, through meeting the demands of countries increasingly seeking to hedge against US dollar hegemony. In positioning itself an international asset and wealth management centre, Hong Kong is grappling with an ascendant Asia with a burgeoning upper-middle class. Islamic financial innovation could provide a conduit for greater synergy with Muslim-majority states. Reforms are needed to ensure dividends in the financial sector accrue to the public, and that we can bridge the Chinese innovation pipeline and overseas markets. In recent years, the authorities in mainland China have considerably ramped up controls on not just the initial public offering (IPO) process but also more broadly on certain sectors such as tech and education Hong Kong’s stock exchange and the Securities and Futures Commission should jointly lobby the mainland authorities to allow companies with a significant mainland presence that wish to list in Hong Kong to do so without being first vetted by the China Securities Regulatory Commission. Companies relocating their headquarters to Hong Kong should be granted a fast-track IPO approval process. These companies should be required to hire locals, with a threshold percentage of the board comprising Hongkongers. Such measures would go a long way towards reviving our IPO market while also enabling job creation and training opportunities for local talent. Hong Kong must also increase its systemic risk appetite in redirecting capital towards nascent sectors under-explored on the mainland. In areas from Web 3.0 to geopolitical forecasting and business advisory services, the administration should harness the private sector’s creative potential by removing bureaucratic obstacles and fostering a market-friendly environment. Lee’s address suggested the need for Hong Kong to reach out to economies beyond the mainland and United States. The easing of visa restrictions and sponsorship of joint cultural productions with Belt and Road Initiative countries – especially in Southeast Asia and the Gulf – are concrete measures aimed at bolstering civil society ties with these emergent powerhouses, mirroring China’s grand strategy. We must continue to attract talent from these regions, and plug the knowledge gaps and deficiencies in the cultural awareness of both mainland and Hong Kong companies. Yet we must not neglect the key regions with which China shares increasingly strained relations, such as Northeast Asia, Europe and India. In the Global North, South Korea, Japan, Germany, France and Italy remain leading consumer markets for Chinese exports. Hong Kong has a role to play here, given its long-standing ties with these markets. We must seek to move the needle in these countries when it comes to perceptions of China, pursuing deeper educational, cultural and civil society exchanges. Our administration should establish institutions and informal channels for business chambers and expatriates to convey feedback, incorporating them into Hong Kong’s governance processes. A clear starting point would be higher education. The policy address pledged over 80 hectares of land for the Northern Metropolis University Town. We should court world-leading and regionally prominent universities, encouraging them to establish campuses in Hong Kong. Given our internationally accredited academic ecosystem, with ample funding and the offer of a high quality of life, we must strive to be Asia’s premier cradle for human capital. While American institutions may be increasingly wary of engaging with the mainland, European and Southeast Asian stalwarts could be drawn here through generous land and start-up subsidies as well as refined patent regulations. The best stories are told through personal experience. Lee’s address recognised the need to reinvigorate Hong Kong’s appeal to tourists by tapping our hidden treasures, such as the countryside, outlying islands and historical sites. We must remind ourselves that tourists do not come to Hong Kong to see a cheap mimicry of mainland culture. Nor is competing on price with our Greater Bay Area rivals ever a viable strategy. Uniqueness is crucial. A recent exhibition by two young Hongkongers displayed the untold stories of Chinese soldiers who fought for the Allied powers during the second world war. Our city is built in part by diasporic Jewish and Indian families who took refuge here and made it their home. The golden era of Cantopop was defined by the blending of Japanese and Western music with lyrics written with classical Chinese influences. Such organic bricolage is what makes this city great. A viable tourism strategy, then, goes hand in hand with an ambitious cultural blueprint: one that emphasises originality and pluralism, as opposed to instant consumption. To weather the storms ahead and face our complex future, Hong Kong must confidently embrace its tumultuous past and admit to its present imperfections.

As Hong Kong strategises for success, it should celebrate its uniqueness

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Being part of ‘one country’ bestows market access and strategic heft but it is the distinctions between the ‘two systems’ that make us competitive

Being part of ‘one country’ bestows market access and strategic heft but it is the distinctions between the ‘two systems’ that make us competitive