The slump in Hong Kong’s stock market over recent years has stirred up pessimism about the prospect of the city maintaining its role as a major international financial center, with the gloomiest naysayers even foretelling “the end of Hong Kong”.

Invariably, the naysayers, including some well-known economists, have simplistically equated the performance of the stock market with the robustness of a financial center, and overlooked the plain fact that stock prices are driven by liquidity most of the time. Liquidity itself is driven by numerous factors. For example, the huge volume of money that fled Europe and the Middle East and sought safe haven in the United States after the outbreak of the Russia-Ukraine and the Israel-Hamas conflicts has contributed significantly to the outperformance of the US stock markets over recent years, whereas Washington’s geopolitical maneuvers against China and its antagonism toward the Hong Kong Special Administrative Region has driven a large chunk of international capital out of the city’s stock market, taking a toll on its performance.

The US stock market witnessed huge fluctuations in the past, with the most recent crash occurring soon after the eruption of the global financial tsunami triggered by the subprime mortgage crisis in 2007-08. No learned economist ever predicted the end of New York’s role as an international financial center. Those naysayers, particularly the erudite economists, were misguided when they equated the performance of Hong Kong’s stock market with its role as an international financial center — if they were not ill-motivated.

Whatsoever, the naysayers are doomed to fail as their predecessors have over the years. The Hong Kong international financial center emerged, grew, and prospered by primarily serving the needs of a huge economic hinterland, i.e., the Chinese mainland. This is evidenced by the fact that mainland companies listed on the Hong Kong Stock Exchange had increased to more than 1,400 by 2023 since beer-maker Tsingtao Brewery became the first mainland company to go public in Hong Kong in 1993, and now account for 77 percent of the total market capitalization of the Hong Kong stock market.

This economic hinterland, as well as its needs for Hong Kong’s financial and professional services, could only grow further as the world’s second-largest economy ascends to the top place in the years ahead as China moves toward building a high-standard socialist market economy by 2035 through high-quality development, as promised in the Resolution of the Central Committee of the Communist Party of China on Further Deepening Reform Comprehensively to Advance Chinese Modernization.

It is ridiculous for some to suggest that Hong Kong’s role as an international financial center will wither, or even end, when the huge economic hinterland it serves remains on a relatively strong growth trajectory. The International Monetary Fund forecast in late May a 5 percent growth in the mainland’s GDP for this year and a 4.5 percent growth for 2025, both up by 0.4 percentage point from the previous targets, which are considered decent growth rates — given the sheer size of the Chinese economy and the sluggish global economy. The IMF’s earlier baseline forecast was for the global economy to continue growing at 3.2 percent during 2024 and 2025, at the same pace as in 2023, with the growth of advanced economies rising to 1.7 percent in 2024 and 1.8 percent in 2025 from 1.6 percent in 2023.

Besides the absurdity of the arguments presented by the naysayers, including the one that Hong Kong’s close economic link with the mainland is a curse, Hong Kong residents and international investors can take comfort in the CPC Central Committee’s pledge of “harnessing the institutional strengths of the ‘one country, two systems’ policy … to consolidate and enhance Hong Kong’s status as an international financial, shipping, and trade center”.

The resolution adopted at the third plenary session of the 20th Central Committee of the CPC last week is a framework document, and thus offers no detailed measures on how to boost Hong Kong’s status as an international center. But Hong Kong residents and international investors can rest assured that the appropriate and necessary measures will come in due course. Unlike Western politicians who continually issue checks that bounce while courting voters during election years, the CPC is not known for indulging in that kind of practice. This is evidenced by the successful implementation of all national five-year plans for social and economic development since 1953.

The author is a current affairs commentator. 

The views do not necessarily reflect those of China Daily.