At a symposium organized by the Hong Kong and Macao Work Office of the Communist Party of China Central Committee on Nov 8, Director Xia Baolong had in-depth exchanges with 29 Hong Kong business leaders in Shenzhen.
The symposium, also attended by several other central government officials and Hong Kong Special Administrative Region Chief Executive John Lee Ka-chiu, provided a rare opportunity for the central government, the HKSAR government and Hong Kong business leaders to candidly exchange views. Its political significance is indisputable at a time when Hong Kong faces weak economic recovery, declining competitiveness, increasing government financial constraints, industrial transformation and upgrading difficulties, and ominous international political and economic situations. It reflects the central government’s concerns about Hong Kong’s economic future, evincing a vivid sense of urgency. To accelerate Hong Kong’s economic growth, the central government naturally hopes that Hong Kong’s business community can demonstrate its patriotism and love for Hong Kong by participating in the city’s economic development.
At the symposium, both Xia and Lee urged the Hong Kong business community to play a bigger role in Hong Kong’s development in the face of the city’s pivotal period of economic transformation.
Xia and Lee have expressed similar expectations several times this year, indicating that the central and HKSAR governments are eager to work with the Hong Kong business community to lay the foundation for the city’s long-term and sustainable development. After all, without the active participation of the business community, especially its long-term investment and participation in new industries, the long-term development blueprint for Hong Kong, which was drawn up by the central and HKSAR governments, will lack sufficient resources for realization.
Meanwhile, Xia expressed optimism that in the country’s new round of reform and opening-up, the Hong Kong business community will surely be able to find a bigger stage, play a more significant role and make more substantial contributions.
Indeed, in a geopolitical landscape wherein the United States and its allies relentlessly suppress China including the HKSAR, the global economy remains gloomy, and the economic center of gravity of the world is shifting eastward, it is difficult for the Hong Kong business community to find more fruitful investment opportunities in places other than the city and the Chinese mainland.
I believe the business community will actively respond to the central government’s calls and expectations, braving difficulties and challenges.
If even Hong Kong’s business community is reluctant to invest in the city, the HKSAR government will find it more difficult to attract investment from the Chinese mainland and overseas.
Xia’s call for the business community and the HKSAR government to work together to further the city’s economic development has gained widespread resonance in Hong Kong society, reflecting a subtle ideological change regarding the city’s governance philosophy.
Many people have long been confused about the relationship between the government and the business community. In the era of British rule, the Hong Kong government practiced a “laissez-faire” governance philosophy, which was also dubbed “positive noninterventionism” or “small government, big market”. The British Hong Kong government and most Chinese elites firmly believed that this governance philosophy was the main reason behind Hong Kong’s economic miracle. This governance philosophy advocated a functional division of labor between the government and the business community, with the former mainly focusing on administrative management, maintaining the rule of law, safeguarding private property rights, constructing necessary infrastructure for economic development, and providing limited social welfare. The government refrained from engaging in financial activities and never favored any industries and enterprises or “picked the winners”. At the same time, the government would not allow the business community to interfere in politics or harbor inappropriate political ambitions. Of course, the actual situation was more complicated. Still, the British Hong Kong government was unwilling to lead in promoting economic and industrial development, and it lacked the experience and expertise for doing so. There was also little demand from the business community for government leadership on economic matters.
After the 1997 handover, many senior government officials and socioeconomic elites still believed in “small government, big market”. Still, the influence of the business community in Hong Kong politics has increased under the constitutional arrangements of “Hong Kong people governing Hong Kong” and “a high degree of autonomy”, triggering concerns about corruption, lack of distinction between public and private affairs, private gains at the expense of public interests, and economic monopolization that may arise from “collusion between government and business”. To avoid criticism or suspicion of “government-business collusion”, the HKSAR government has often deliberately distanced itself from the business community and consortiums. This makes it difficult for some public-private cooperation projects that would benefit society to be implemented smoothly.
Hong Kong cannot rely solely on its traditional advantages to “succeed with only a single trick”. It must embrace reforms in a changing world. It must vigorously invest in and promote innovation and technology development
Worse, anti-China forces in the city have spewed accusations of “government-business collusion” against government policies, further hampering govern¬ment-business cooperation.
As the US and its allies have intensified their suppression of Hong Kong, the advantages of its traditional industries have declined.
People have increasingly realized that Hong Kong needs to strengthen cooperation with the Chinese mainland and undertake industrial transformation and upgrading to achieve sustainable economic development in the long run. The dogma of “small government, big market” has increasingly become a thing of the past. More and more people are asking the HKSAR government to assume the role of leading and promoting economic development. In their mind, the most critical and urgent task is to create a more conducive environment for the business sectors and strengthen the incentives for them to invest and set up business in Hong Kong. They do not want the HKSAR government to be timid or hesitant in cooperating with the business community because of worries about criticism of “government-business collusion”. Instead, the government should be more responsive to the demands and concerns of the business community and create a better business environment. Over recent years, the specific and explicit demands made by the business community to the HKSAR government include vigorously exploring and broadening Hong Kong’s international space for business development, especially in tapping the markets of developing countries; accelerating Hong Kong’s integration into overall national development; accelerating developing the Guangdong-Hong Kong- Macao Greater Bay Area into a “common market”; and simplifying laws and rules to create a more congenial and convenient business environment for economic activities; building a fairer competitive environment to allow more enterprises to gain development opportunities; benefitting local organizations and professionals more in areas such as government procurement, awarding engineering and construction contracts and outsourcing services, supporting some industries that have significant strategic potential for the city’s long-term economic development; providing ample land to reduce the cost of new industry development, and working with the business community to chart the city’s future development direction; actively training and importing talent; strengthening the government’s ability to formulate long-term development strategies, cultivate new industries and strengthen old industrial sectors; promoting the integration of “industry, academia and research”; and improving the efficiency of the government and the sense of responsibility of officials.
Taking the development of innovative technology industries as an example, Xia warned that the scientific and technological revolution and industrial transformation are raging ahead. Science and technology have increasingly become the leading factors in socioeconomic development, and innovation has become the first driving force of development.
Hong Kong cannot rely solely on its traditional advantages to “succeed with only a single trick”. It must embrace reforms in a changing world. It must vigorously invest in and promote innovation and technology development.
The reason why Shenzhen has successfully developed its innovation and technology industry is that it has created an ecosystem conducive to the development of innovation and technology, including government support, the massive gathering of talent, industrial clustering, an open market environment, an intense atmosphere of innovation and entrepreneurship, and government decisions made quickly and boldly. Hong Kong started developing its innovation and technology industry quite late. Although Hong Kong has some advantages in this area, such as financing, strong intellectual property protection, product promotion and sales, it still has many shortcomings. In particular, the Hong Kong business community lacks the know-how, experience and confidence in this industry and has no self-confidence in long-term investment. It harbors severe concerns about the viability and profitability of this industry. In these circumstances, it is all the more imperative and critical for the HKSAR government and the business community to take a macro and long-term perspective, strengthen complementary advantages with Shenzhen and other GBA cities, and work together to create a larger, more comprehensive and more efficient ecosystem that is favorable to innovation and technology development. In an environment where the US and its allies increasingly tighten their technological blockade on the country and the SAR, collaboration with the mainland is indispensable to Hong Kong’s innovation and technology development.
The HKSAR government’s proactiveness is essential, but the active participation and cooperation of the business community is indispensable.
Businesspeople “cannot afford to do business without profit”, but the central government will not require them to engage in loss-making business. People in the business community also understand that they have a responsibility and commitment to Hong Kong society and are willing to contribute to Hong Kong and the country within their capabilities as well as supporting and cooperating with the HKSAR government’s development strategies. The central government hopes that they will get rid of shortsightedness, adopt a longer-term perspective with a broader vision, and invest in new industries with a relatively long payback period.
After years of changes and considering the challenges ahead, Hong Kong society’s perception of the government-business relationship has palpably altered. The notion of “cooperation between government and business” is gradually supplanting that of “collusion between government and business” as the mainstream thinking within the government and society, creating a favorable social atmosphere for government-business cooperation to promote economic development and industrial transformation and upgrading.
The author is a professor emeritus of sociology, the Chinese University of Hong Kong, and a consultant for the Chinese Association of Hong Kong & Macao Studies.
The views do not necessarily reflect those of China Daily.
