As China's world city, Hong Kong needs to become even more international in order to contribute to the increasingly globalized Chinese economy.
In the 14 years since the handover took place, Hong Kong has increasingly - albeit at times reluctantly - integrated with the mainland economy, in particular the regional economy of the Pearl River Delta region. It has provided Hong Kong with good enough mainland connections that could easily be turned into a form of social capital that would enhance the advantages and returns of the city's international ventures.
Overseas entities are more attracted to Hong Kong than mainland cities for two reasons in particular. The first is the mainland connections Hong Kong has. The second is the institutional setup of Hong Kong that is closer to an Anglo-Saxon system than to the mainland policy regime.
In other words, that which makes Hong Kong most attractive to overseas entities that wish to engage in any kind of relations with the Chinese mainland is that the city is both an insider and an outsider - an identity and role that no mainland cities can emulate. It is enshrined and further reinforced by the Basic Law in the form of "One Country, Two Systems".
However, in the post-financial crisis era, internationalization should not mean the traditional focus on advanced countries. For one thing, the relationships of Hong Kong with most advanced countries are more intimate than any other cities on the mainland. This is especially true of the city's common law legal system, which ties it closely with the common law systems of the British Commonwealth, which includes a great number of countries.
For another thing, the financial crisis of 2008 might represent a watershed in world development with emerging economies taking over the role of growth engines from the developed countries. The latter are still struggling with recovery while the emerging economies have already resumed their high growth patterns of development. The world has thus changed with the emerging economies contributing a larger share of global growth and development. In the new multi-polar global system that has replaced the triad of the US, EU and Japan of the past 60 years in the post war era, Hong Kong should take the lead over mainland cities. It should look to develop close working relationships with emerging economies such as India, Brazil, Russia, South Africa and the ASEAN countries.
Under the Basic Law, Hong Kong has the right to manage its economic, social and cultural relationships with foreign countries. It will not enter into matters categorized as foreign affairs as that is reserved for the central government.
In fact, the other special administrative region under the "One Country, Two Systems" regime - Macao - has been asked by the central government to promote its relationship with Portuguese speaking countries.
Hong Kong has an even bigger advantage to maintain and develop its historical ties with India, South Africa and other developing economies under the umbrella of the Commonwealth.
And since Hong Kong has already an agreement with Russia to waive visas for the visits of citizens of both places, it should build upon this approach and connect with countries of the former Soviet Union in Eastern Europe as well as Central and West Asia.
The visa-waiver agreement with Russia shows that it would be much easier for Hong Kong to increase its ties - economic, social and cultural - with countries like Russia more than the mainland because the city is a developed society that bears no economic threats or trade pressure to other countries.
Being a free trade port, Hong Kong has much less obstacles preventing it from establishing free trade agreement with countries and regions in the world as a member of the World Trade Organization (WTO) and with endorsement from the Beijing government. As both insider and outsider with the mainland, its relationship with other countries will include a strong element of connections with the mainland but without any political implications that would arouse uneasiness in other countries.
New internationalization efforts in Hong Kong could take several forms, and the following are just three of them.
First, free trade agreements with ASEAN, Commonwealth nations (in particular India and South Africa) and the former countries that made up the Soviet Union especially Russia. The new network of free trade agreements would be supplementary to the network built up by the mainland.
Second, before, during and even after the negotiation for free trade agreements, Hong Kong should open up more with these target countries. Examples would include offering scholarships and exchange programs with their universities and institutions of learning, setting up economic and cultural offices in these countries to promote economic and cultural exchanges as well as tourism. And like in the case of Russia, waiving visitor visa requirements for their citizens. Hong Kong should be open once again like in the 19th and early 20th centuries to allow people from all around the world to enter freely to do business and the like.
Third, like Singapore, Hong Kong should organize and host international conferences, forums and meetings for governments, public and private institutions and NGOs. Hong Kong should not be involved in those with international political agendas. However, in the areas of economic, trade, social and cultural development, and environmental concerns, there is still a lot of space for Hong Kong to take up a leadership or coordinator role at regional and international levels.
The author is head of China Business Centre, Hong Kong Polytechnic University.
(HK Edition 07/08/2011 page3)