Judging from the remarks of the members of the Hong Kong Macau Affairs Office (HKMAO) delegation that visited Hong Kong from August 23 to 25, and from the inspection trip including the former Chief Executives of Macau and Hong Kong (Edmund Ho and C. Y. Leung) to Guangzhou on August 24, new dimensions of regional integration between Guangdong, Hong Kong and Macau have already emerged.
First and foremost, the portfolios of the mainland officials visiting the HKSAR covered not only science and technology, but also banking and monetary affairs, illustrating the specific foci of regional integration. The delegation was led by Huang Liuquan, Deputy Director of the HKMAO, together with Zhou Chengjun, the Director of the Finance Research Institute of the People’s Bank of China. Other officials included Hu Zhaohui, the Deputy Director of the Department of Development Planning of the National Development and Reform Commission, and Huang Shengbiao, the Deputy Director-General of the Department of Research Commercialization and Regional Innovation of the Ministry of Science and Technology.
The speech delivered by Huang Liuquan on August 23 was politically significant. He revealed that, in response to the request of Hong Kong Chief Executive Carrie Lam to HKMAO Director Xia Baolong in May for a delegation to explain the 14thfive-year plan to the people of Hong Kong, the delegation’s visit was eventually made. Huang added that the 14th five-year plan realizes the vision and mission of the Communist Party f China and implements the idea of using “people as the center” in Beijing’s developmental plan, which embraces the path of increasing the living standard of citizens, bringing about employment, building up social welfare protection, taking measures to achieve health and medical excellence, enriching the people’s “spiritual and cultural life,” and achieving the objective of “common prosperity of all people.”
Huang emphasized the dimensions of integration in the 14thfive-year plan, including monetary and financial affairs, shipping, trade, aviation, innovation and technology, legal services, intellectual property rights, and culture and arts. Most significantly, Qianhai and Hengqin are the “collaborative platforms” of such integrative areas between Guangdong, Hong Kong and Macau.
If key phrases are important for us to understand the central government’s policies toward Hong Kong and Macau, Huang’s appeals to the people of Hong Kong to “converge” in the realms of “policy,” “sectors,” “markets,” “thinking” and “path” are economically and politically significant, because the mentality of the ruling elites in the HKSAR are expected to accelerate the process and deepen the dimensions of regional, socio-economic, technological and monetary integration between the Hong Kong Special Administrative Region(HKSAR), Guangdong and the Macau Special Administrative Region (MSAR).
The context of regional integration was outlined publicly by the Deputy Director of the National Development and Reform Commission, Ning Jizhe, who said on August 23 that China’s policy of “dual circulation” remains the mainstream direction. As such, the HKSAR must grasp Beijing’s policy trend. Furthermore, the HKSAR, according to Ning, must make adaptational efforts at monetary services, digital transformation, international trade, innovation and technology, and green development. He finally added that both Hong Kong and Macau must integrate into the 14thfive-year developmental plan, participating in the Belt and Road initiative and contributing to the motherland’s “dual circulation” process.
It is noteworthy that Ning pointed to the continuous role of Hong Kong as not only “a partner for the mainland participation in international trade” but also “an important channel for overseas investors and capital accumulation.” It looks as if pragmatism prevails in Beijing’s economic policy toward the HKSAR. This pragmatism perhaps explains why, shortly three days after the meeting of the Leading Group on Financial and Monetary Affairs chaired by President Xi Jinping on August 17, it was announced that the Anti-Sanctions Law for Hong Kong was temporarily postponed for further studies of the possibilities of incorporating it into Annex III of the Hong Kong Basic Law. Clearly, the HKSAR remains a crucial international financial center from the perspective of the central authorities.
Luo Huining, the Director of the Liaison Office, appealed to the need for the HKSAR to grasp the 2035 vision of the central government, fostering its economic development and improving the people’s livelihood. Given Luo’s frequent emphasis on the need for Hong Kong to improve the people’s livelihood, it can be expected that the new Legislative Council after its election by the end of 2021 will likely focus on the agenda of accelerating the supply of land and public housing units.
An important speech was delivered by Chief Executive Carrie Lam on August 23, when she mentioned Hong Kong’s multiple roles in the 14thfive-year plan. Hong Kong is expected to elevate its status as an international monetary, shipping, trade, and offshore Renminbi centers. Furthermore, the high value-added service sector will be a target of Hong Kong’s development, while the innovation and technology hub will have to be established together with a cultural and arts exchange center. Apart from the need for Hong Kong to enhance cross-border traffic, trade and logistics, youth exchanges and mutual professional recognition will have to be accelerated. Clearly, the HKSAR government under Lam’s leadership understands the urgency and necessity of regional integration, contributing to the 14thfive-year plan and grasping the chances provided by the “dual circulation” processes.
In the area of monetary integration, the former chief executive of the Hong Kong Monetary Authority, Joseph Yam, said that, for the internationalization of Renminbi to be accelerated, Renminbi should be used for quotation, trading and clearing of stocks covered by the Heng Seng Index. Yam’s suggestion is important because the internationalization of Renminbi needs to fully utilize the role and functions of Hong Kong as an offshore exchange and circulation center. Not surprisingly, Zhou Chengkun from the People’s Bank of China remarked in his speech on August 23 that cross-border securities would be accelerated, while the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect would allow capital inside and outside China to circulate actively between the HKSAR and the mainland. Zhou added that Hong Kong remains the largest offshore center for Renminbi, occupying 60 percent of the global offshore Renminbi deposits and 80 percent of the offshore Renminbi bonds. If so, there are rooms for the central authorities to fully utilize the monetary functions of the HKSAR. If Macau is going to build up its new securities center, it can be anticipated that one of its crucial objectives will be the facilitation in the process of internationalizing Renminbi.
When the mainland delegation visited the HKSAR, an important delegation led by Zhu Xiaodan, the Director of the Hong Kong-Macau-Taiwan Committee under the Chinese People’s Political Consultative Conference (CPPCC) visited Guangzhou city and began a four-day inspection of the implementation of the Guangdong-Hong Kong-Macau-Greater Bay Area developmental blueprint. The two former chief executives of Hong Kong and Macau, C.Y. Leung and Edmund Ho respectively, joined the delegation.
The committee decided that every year from 2021 to 2025 it is going to hold an annual forum to conduct “democratic supervision” activities, overseeing the implementation of the blueprint. Three platforms were regarded as the priorities of “convergence,” namely the serving sectoral cooperation between Shenzhen’s Qianhai and the HKSAR, the demonstration region of collaboration between Guangzhou’s Nansha and Guangdong-Hong Kong-Macau, and the regional construction between Zhuhai’s Hengqin and Guangdong-Macau. Several areas of cooperation are emphasized: technology innovation, investment and trade, talent development and the employment for the youth from Hong Kong and Macau. The inspection team included businesspeople from Hong Kong and Macau, interacting with the technology expert and chief executive officers of high-tech institutes in Shenzhen, and meeting experts of the Chinese medicine technology park in Hengqin. Edmund Ho added that Hengqin can help Macau to diversify its economy, while C.Y. Leung appealed to the governments of Hong Kong and the mainland to do more to propel the young people to work in South China. Leung added that Hong Kong’s universities which have research projects in the Greater Bay Area have tremendous potential to contribute to national development through their scientific products.
On August 27, the Guangdong Pharmaceutical and Supervision Bureau and Guangdong Health Department announced that medical products from the HKSAR can be tested and approved for usage in five mainland-based hospitals, including the Shenzhen Hospital under the management of the University of Hong Kong. This announcement was a breakthrough in the medical collaboration between the HKSAR and the Guangdong province, implying that more Hong Kong medical products will likely be tested, recognized and approved for usage in the mainland. In the past, the testing and approval of the Hong Kong medical products were centralized by the National Pharmaceutical and Supervisory Bureau; the testing assessment period lasted for 200 days, and the approval period could be up to 235 days. Now, with easier cooperation between the two sides at the regional level, the assessment period lasted for only 80 days and approval period 115 days. Clearly, the streamlined processes of assessment, recognition and approval facilitates cross-border medical testing and usage. Many Hong Kong residents living in the nine cities of the Greater Bay Area can and will benefit from the new scheme, reducing their need to return to the HKSAR to buy and acquire their medicine. At the same time, the medical standard in the Greater Bay Area can and will be enhanced through easier mainland testing, approval, accreditation and usage.
Overall, the three important recent events – the delegation from the HKMAO, the inspection of Hong Kong and Macau CPPCC members to the Greater Bay Area, and the mutual professional recognition of medical products between Hong Kong and Guangdong – are signaling the closer socio-economic, technological and medical integration between Guangdong, Hong Kong and Macau. New dimensions of regional integration are emerging and prioritized: closer cooperation in technology and innovation, the accelerated usage of Renminbi in Hong Kong’s stock market, the mutual recognition of medical products, and the provision of more jobs and opportunities for Hong Kong and Macau youth in the Greater Bay Area. After these priority areas are propelled further, closer regional integration between Guangdong, Hong Kong and Macau will be witnessed. Accelerated regional integration in South China comprising Hong Kong and Macau is perhaps entering a new era, leading to the likelihood of an eventual territorial integration between Macau and Hengqin on the one hand and Hong Kong and Qianhai sooner or later.