Blog

The 14th Five-Year Plan and Opportunities to Hong Kong

Hong Kong's social and economic development have always been closely connected with the Mainland's development and needs. The evolution of the overall development of the country has catalysed the new development landscape for Hong Kong's economy. Since the Mainland's reform and opening-up started in the late 1970s, many enterprises and people from Hong Kong had moved to the Mainland for development opportunities, driving the shift of Hong Kong's economy from the light manufacturing industry to the services industry. The listing of the first state-owned enterprise in Hong Kong in 1993 sparked the wave of the subsequent fund-raising boom by Mainland enterprises in Hong Kong and bolstered Hong Kong's development as a financial centre. The listing of the first Mainland enterprise in Hong Kong and Shanghai simultaneously in 2006 deepened the interaction between the two markets and laid the foundation for the Stock Connect in 2014. Hong Kong's success has been built on keeping pace with the changing needs of the Mainland market. Helping the country's development also advances Hong Kong's own development.

“The Outline of the 14th Five-Year Plan for National Economic and Social Development and the Long-Range Objectives Through the Year 2035” (the Outline) was endorsed earlier at the annual session of the National People's Congress. The Outline pins down the basic realisation of socialist modernization as the long-range objectives in 2035, by then the country's economic and technological strength as well as composite national strength will have risen significantly. The Outline also sets out the country's development targets, philosophy and key missions in the 14th Five-Year Plan period. This important document reflects the country's assessments of the current and future international situation and domestic development, and its preparation and responses.

The Outline puts forward new development concepts for building a new development pattern in a new development stage. The Mainland's GDP exceeded RMB 1 trillion last year. More than 55 million rural population were lifted out of poverty during the 13th Five-Year Plan period. The country advanced the attainment of the first centenary goal of building a moderately prosperous society in all respects, and is now heading for the 2035 long-range objectives of building a great modern socialist country. This goal has started a new stage of national economic and social development, which calls for the new development concepts, that is, Innovation, Coordination, Green, Openness and Sharing. In fact, these five development concepts were introduced to address corresponding problems. Innovation is to provide development momentum. Coordination is to deal with the problem of unbalanced development. Green development is to handle the issues of harmonious coexistence of human and the nature. Openness is to address the requirement of a higher level of internal and external synergies for better development. Sharing is to tackle the issues of social fairness and distribution in the society. This is a grand development blueprint to meet the people's ever-increasing expectations for a better life. What are the implications for Hong Kong?

The country's new stage of development in fact also marks a new development landscape for Hong Kong. To explore the new opportunities and break new grounds amid crises and changes, we need to stay ahead of others, either by taking the first-mover advantage or "overtaking at the bend". The Outline puts forward that it is of paramount importance to make innovation and technology a core driving force, equipping industries and enterprises with capability to upgrade and transform and to produce revolutionary products. In addition, we need to seize new business opportunities, explore new markets and identify new consumer segments to which we did not pay attention in the past. Hong Kong must grasp the opportunities firmly and participate fully.

Therefore, we should pay attention to the logics, concepts and content of the Outline, as well as the areas where it supports Hong Kong. The Outline supports Hong Kong to consolidate and enhance the competitive advantages, not only in the traditional areas of international finance, shipping, and trade centre, but also as an international innovation and technology centre and an international aviation hub that were newly mentioned. In addition, the Outline includes the Innovation and Technology Co-operation Zone in Shenzhen-Hong Kong Loop as a major platform of co-operation in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) for the first time, alongside Qianhai, Hengqin and Nansha. These are all relevant to whether Hong Kong can gain a new impetus for economic growth, as well as our ability to sustain economic diversification and provide more high-quality employment opportunities.

The Outline puts forward a new development pattern of “dual circulation”, which takes the domestic circulation as the mainstay while letting the domestic and external markets boosting each other. The establishment of the “dual circulation” is for attaining development that is of higher quality, higher efficiency, greater sustainability and greater safety. From the perspective of economic development and business operation, Hong Kong should utilise the GBA as the entry point to grasp the opportunities arising from the ever-expanding and increasingly rigorous demand for better quality of goods and services in the Mainland market; and technological innovation is the “fast lane” for participating in the country's domestic circulation. At the same time, Hong Kong should also strengthen its roles and functions as a springboard, an intermediary, a high value-added service platform, an international talent and fund pool, a testing ground and a firewall, in order to enhance and enrich the interaction and connection between the Mainland and international markets, as well as the connection between the country's and international standards.

The country is heading for the goal of building a modern socialist country in an all-round way, characterised by sustained and relatively fast economic development, ever-growing size of middle-class consumers, and continued transformation and upgrading of industries. This means Hong Kong will have vast opportunities to participate in new industries, new forms of business and new ventures. Enterprises should study more comprehensively and in depth the logics and content of the Outline, so as to fully understand the new development trends, and seize the business opportunities with their own edges.

Safeguarding national security is the prerequisite to the steady development of the country and Hong Kong in the long term. It is imperative for Hong Kong to fully and faithfully implement the “One Country, Two Systems” principle, uphold the constitutional order of the HKSAR as enshrined in the Constitution and the Basic Law, implement the legal system and enforcement mechanism for safeguarding national security and “patriots administering Hong Kong”, and maintain the social stability. This is necessary for the steadfast and successful implementation of “One Country, Two Systems” principle and better integration of Hong Kong into the overall development of the country, so as to let our economy and people's livelihood make continuous progress.

March 21, 2021