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Capitalising on Core Advantages and Reinforcing Connectivity

At the Meeting Celebrating the 25th Anniversary of Macao’s Return to the Motherland, President Xi Jinping delivered an important speech in which he articulated profound conclusions regarding the unique institutional advantages of the “One Country, Two Systems” principle and its practical implementation in Hong Kong and Macao. He clearly noted that the “One Country, Two Systems” principle, with its distinctive institutional advantages and strong vitality, is a good system that sustains the long-term prosperity and stability in Hong Kong and Macao, and we must stay committed to the cause. It is also a good system for ensuring peaceful coexistence and mutual benefit between different social systems, embodying the values of peace, inclusiveness, openness and sharing. In today's complex geopolitical landscape, President Xi’s speech carries even greater significance and instils deeper confidence.

President Xi’s important speech outlined the directions for the steadfast and successful implementation of the “One Country, Two Systems” principle in Hong Kong in the new era, along with four key principles to be observed:

1. Staying committed to the fundamental policy of “One Country” and fully delivering the benefits of “Two Systems”;
2. Ensuring high-standard security and pursuing high-quality development;
3. Leveraging our unique advantages while reinforcing our connectivity with both the Mainland and the world; and
4. Carrying forward core values to boost inclusiveness and harmony.

Practising these four principles will enable Hong Kong to make greater contributions to national development, and better harness our potential to achieve economic progress. Staying committed to the fundamental policy of “One Country” and fully delivering the benefits of “Two Systems” are the essence of this institutional advantage. Only by ensuring high-standard security can we establish the foundation for pursuing high-quality development. With solid security in place, we can focus our energy and resources on economic development, thus creating a brighter future for the city while contributing greater "Hong Kong strength" to the great rejuvenation of the Chinese nation.

President Xi emphasised the need for us to be more open and inclusive, to expand international linkages, and raise our global standing and appeal, so that the reputation of “Hong Kong, China” and “Macao, China” as international metropolises will grow stronger. We should fully align ourselves with national development strategies, accelerate our integration into the country’s overall development, and better play our role as a bridge in building a new development paradigm.

So, how can we build on the existing foundation to strengthen and promote Hong Kong’s development as an international city? And how can we reinforce our connectivity with both the Mainland and the world, and better leverage Hong Kong’s unique advantages in line with local conditions?

Taking the “mutual market access” mechanism in finance as an example, the connection between the capital markets of the Mainland and Hong Kong has been established for ten years. This mechanism is gradually expanding market connectivity from stocks to bonds, exchange-traded funds (ETFs), as well as risk management and wealth management products. It has become the most important channel for foreign capital to invest in the Mainland market and provides a secure and efficient pathway for Mainland capital to allocate assets offshore. Looking ahead, we must promote further institutional innovations, product innovations, and advancements in cross-boundary cooperation. This includes expanding connections between the Mainland and emerging markets through Hong Kong, while reinforcing cooperation with traditional markets. Such efforts will enhance the scale and liquidity of Hong Kong’s financial market, better meeting the financing needs of enterprises and institutions in the face of technological advancements and the geopolitical landscape. Ultimately, this will enrich Hong Kong's role as an international financial centre, strengthening its advantages and global influence.

Over the past few years, the HKSAR Government has actively engaged in visits to various regions, including the Mainland, traditional markets in Europe and the United States, as well as the Middle East, ASEAN, and other 'Global South' markets. These efforts aim to bolster cooperation between Hong Kong and these regions in financial services, commerce, and trade, while also enhancing business-to-business connections. In the past year, the number of companies in Hong Kong with parent companies located in the Mainland and overseas has increased by around 10% year-on-year, reaching a historic high. Foreign enterprises are eager to use Hong Kong as a foothold for developing the Mainland and Asian markets, while many Mainland companies also choose Hong Kong as their primary platform for expanding international business.

As long as we keep moving forward, the future will be promising. In the face of challenges such as protectionism and unilateralism, our country’s commitment to promoting high-level bilateral opening-up remains steadfast. As a “super connector” and “super value-adder”, Hong Kong can effectively leverage its unique position to connect with both the Mainland and the world. We will actively promote bilateral and even multilateral exchanges and cooperation with various regions, particularly through reciprocal visits of business delegations. This includes organising more joint roadshows and investment promotion activities with sister cities in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) to explore mutually beneficial new business opportunities together.

With the staunch support of the country and the collaborative efforts of the HKSAR Government and various sectors of the community, Hong Kong consistently ranks among the top in international rankings. We are recognised as the freest economy in the world, one of the three major international financial centres, and among the top five globally in competitiveness. By continuously solidifying and enhancing Hong Kong’s advantages as an international city, promoting a smoother and more orderly flow of capital, people, goods, and information, and facilitating the seamless alignment of international and national standards, we can enable Hong Kong to play a crucial role in the development of the GBA and the joint pursuit of high-quality “Belt and Road” development. These efforts would not only support the sustained prosperity and development of Hong Kong, but are also our responsibility and duty.

In terms of innovation and technology (I&T) development, each city within the GBA has unique advantages. Close collaboration will drive more comprehensive and rapid progress. The “Hetao Shenzhen-Hong Kong Science and Technology Innovation Co-operation Zone” serves as an important platform that facilitates the convenient and secure cross-boundary flow of people, materials, capital and data between Hong Kong and Shenzhen through groundbreaking and proactive policy innovations. This initiative will enhance the efficiency of R&D in I&T, as well as accelerate the development of industries such as artificial intelligence and life and health sciences. It will not only speed up the cultivation of new quality productive forces but also attract investments and enterprises.

In the future, we will enhance our promotional efforts by sharing the good stories of China, including those of Hong Kong. Our goal is to provide foreign political, business, and financial communities with a comprehensive understanding of the realities and vast opportunities in both Hong Kong and the Mainland. By broadening our network and expanding our “circles of friends”, we aim to create the greatest synergy that fosters mutually beneficial development.

With the Christmas and New Year holidays approaching, the streets of Hong Kong are infused with a festive atmosphere. Many visitors from the Mainland and abroad have come to the city to view the holiday light displays, take part in various celebrations, and experience the festive spirit. Hong Kong, as an international metropolis, exudes a unique charm. By working together and embracing innovation and change, the distinctive brand of Hong Kong under “One Country, Two Systems” will continue to shine, and grow in value and significance.

December 22, 2024