On Sept 29, the financial secretary, Paul Chan Mo-po, together with a team of technology industry leaders, returned from a seven-day visit to Spain (four days) and the United Kingdom (three days).
Both visits made good economic sense. Whereas Spain, in 2023, was Hong Kong’s sixth-largest trading partner, the trade in goods and services between the UK and Hong Kong was 24.2 billion pounds ($32.11 billion) in the four quarters to the end of the first quarter of 2024. Chan, therefore, was on strong ground when he made the case for closer cooperation between Hong Kong and the two countries.
On his blog, he wrote that he had “introduced Hong Kong’s traditional and emerging financial services to the political and business sectors in Spain and the UK, and they showed great interest”. He explained the opportunities available in the Guangdong-Hong Kong-Macao Greater Bay Area to his hosts, who hoped “to further explore and accelerate their expansion” there.
He sensed the business communities in both places were “very willing to establish deeper connections with Hong Kong, showing a strong willingness to cooperate”, which dovetailed nicely with the city’s objectives.
In particular, they wanted to know how best to use Hong Kong to expand their commercial presence throughout China and Asia, and Chan pointed to its role as a regional facilitator. Since national planners envisage an economic powerhouse in the GBA, Hong Kong is ideally placed to handle the incoming investment Chan was encouraging.
In Madrid, Chan focused on enhancing cooperation between Hong Kong and Spain. He met with the president of Spain Startup, Maria Benjumea, and representatives of its prestigious partner, the IE University. The possibility of Hong Kong hosting an innovation and entrepreneurship summit, along the lines of the South Summits that Spain Startup has been successfully organizing since 2012 (for startups, tech talent, investors and entrepreneurs), was mooted.
Chan indicated that Hong Kong was agreeable to hosting the summit to attract startups and investors from the Chinese mainland. He undertook to follow up upon his return home.
When Chan met the president of Madrid’s city council, Francisco de Borja Fanjul Fernandez-Pita, they discussed collaboration across various sectors. Chan reaffirmed Hong Kong’s commitment to the “one country, two systems” policy, emphasizing that its open and welcoming business environment was governed by the common law. He encouraged Spanish enterprises to invest in Hong Kong and explore the extensive markets of the GBA, as well as those of the wider Chinese mainland.
Once Chan arrived in London, he met with government officials, business leaders and professionals. They included the Treasury’s economic secretary, Tulip Siddiq; the Bank of England governor, Andrew Bailey; the Hong Kong-Europe Business Council; and Asia House, a think tank. He was well-received by his hosts, which was unsurprising as Hong Kong continues to be one of the largest sources of foreign investment for the UK.
As the prime minister, Sir Keir Starmer, plans to develop a more constructive relationship with China, Chan’s visit may be considered an early step in that direction.
As in Madrid, Chan drove home the message that Hong Kong’s adherence to the “one country, two systems” policy was unequivocal. He stressed that the common law was being faithfully implemented in the courts, and that the rule of law was being respected.
This must have been reassuring for his hosts, particularly for anybody exposed to the propaganda of the UK’s strident anti-China voices (whether in the form of the foreign office’s spurious six-monthly Hong Kong “reports”, the rantings of Hong Kong Watch and its patron, Lord (Chris) Patten, or the paranoia of the Inter-Parliamentary Alliance on China and its co-chairman, Sir Iain Duncan Smith).
Chan also emphasized that Hong Kong would never “be just another Chinese city”, and he was absolutely correct. As anybody who has studied the Basic Law can confirm, it enables Hong Kong to enjoy a financial, legal, political and social identity that is distinct from the rest of China, and to maintain its own way of life. This is embodied in the “one country, two systems” policy, which has performed yeoman service since 1997. Although the policy was severely tested by the black violence in 2019-20, it has emerged stronger than ever, which must have been music to the ears of Chan’s audiences.
Having declared that “our commitment to the rule of law is as firm as ever”, Chan also explained that Hong Kong has an independent judiciary, which is always a “must” for business leaders and investors.
He said that seven nonpermanent judges on the Hong Kong Court of Final Appeal came from overseas, including three from the UK. He pointed out that Hong Kong was rated highly in the World Justice Project’s Rule of Law Index 2023 (23rd out of the 142 places surveyed, ahead of the US at 26th). He also highlighted that in the “absence of corruption” category, its ranking was ninth, which must have been exactly what the investors wanted to hear.
Chan said many foreign businesses in Hong Kong had recognized this. They had reported that their operations have remained normal since the national security laws were enacted. They also retained their confidence in the rule of law (an apparent reference to the recent survey by the US Chamber of Commerce in Hong Kong, which found that 79 percent of respondents had confidence in the city’s rule of law)
Fate, moreover, smiled on Chan’s visit. On Sept 24, just before he arrived in London, the Global Financial Centers Index, which provides periodic evaluations of future competitiveness and rankings for 121 financial centers worldwide, published its latest report. The index is highly regarded in business circles and has established itself as a valuable reference source for policy and investment decision-makers. Chan was able to announce that Hong Kong was ranked third in the latest index, hard on the heels of New York and London (first and second respectively), and ahead of Singapore (fourth), Shanghai (eighth), and Shenzhen (ninth).
As irresponsible voices in the UK have sought to demonize Hong Kong’s national security laws, Chan went out of his way to explain the impact of the Safeguarding National Security Ordinance (which was enacted on March 23 and gave effect to the Basic Law’s national security obligations (Art 23)). He stressed that the national security laws have ensured a stable and predictable environment for Hong Kong’s economic development.
Chan said many foreign businesses in Hong Kong had recognized this. They had reported that their operations have remained normal since the national security laws were enacted. They also retained their confidence in the rule of law (an apparent reference to the recent survey by the US Chamber of Commerce in Hong Kong, which found that 79 percent of respondents had confidence in the city’s rule of law).
Chan, moreover, was able to buttress his positive messaging with chapter and verse. For example, confidence in the local economy was evidenced by the 4 percent increase in bank deposits so far this year. Whereas Hong Kong’s IPO market was rebounding, fundraising had exceeded HK$50 billion ($6.44 billion) to date. This made the city the fourth-largest IPO market globally this year, with over 100 companies in the pipeline awaiting listing.
There can be little doubt that Chan’s reassuring words resonated with everybody he met, particularly with London’s hard-nosed investors.
Throughout his travels, Chan laid out a vision that will attract foreign investment, inspire confidence and reassure doubters. People in both countries will now have a better understanding of how Hong Kong continues to be a significant player in its own right, and is more than capable of punching above its weight. However, Chan has little time to catch his breath.
Although his trip was undoubtedly a success, the city must now cement its role as a financial hub, a trading entrepot, and a global investment center, and the momentum Chan has generated must be maintained, if not accelerated.
The author is a senior counsel and law professor, and was previously the director of public prosecutions of the Hong Kong SAR.
The views do not necessarily reflect those of China Daily.
