'One country, two systems' passes 20-year test while path ahead is clear

We are celebrating the 20th anniversary of Hong Kong's return to China and 20 is a significant number. At the end of the first 10 years we could only say that the transition was successful; but after 10 more years we can now say with confidence that "one country, two systems" has been successfully implemented.

This innovative institutional arrangement designed by Deng Xiaoping is intended to be an answer to the Taiwan issue. But it was first applied to Hong Kong in 1997 to deal with the city's historical question. Professor Lau Siu-kai, formerly head of the Central Policy Unit, said the original goal of "one country, two systems" was to ensure Hong Kong's peaceful and smooth return to the nation. The city has kept its overall prosperity, stability and way of life.

Has this original goal been achieved? Numbers speak for themselves. According to the Census and Statistics Department, Hong Kong's GDP nearly doubled over the past two decades with an average annual growth rate of 3.4 percent in real terms. Meanwhile GDP per capita rose 60 percent over the same period. Hong Kong has been crowned "the world's most competitive economy" for the second year running, ahead of Switzerland and Singapore, by the Swiss business school IMD. It is noteworthy that Hong Kong topped the ranking on two indicators - "government efficiency" and "business efficiency". If you live in Hong Kong, it is not hard to feel the promise "horse racing will continue and the dances will go on" has been kept.

All these achievements would not have been possible without the advantages of both the "one country" and "two systems" factors. Whenever Hong Kong faced an economic crisis, the central government always came to the rescue, providing favorable policies. These include the Individual Visit Scheme and Closer Economic Partnership Arrangement introduced in 2003, the 14 policies to ensure economic and financial stability in Hong Kong during the 2008-09 financial crisis and the setting-up of the Guangdong free trade zone in 2014. In short, we can conclude that "one country, two systems" has been successful in the sense that it has ensured Hong Kong's prosperity.

But we also faced some deep-seated problems which must not be overlooked. These include widening income disparity, slow social upward mobility and a housing shortage. On the one hand, we have to face these problems squarely; on the other, we need to realize that these challenges are inevitable in an open, small, capitalist and free economy like Hong Kong. Moreover, "openness", "capitalism" and "free economy" are actually inherent elements of Hong Kong's pre-1997 system. We can say that these social problems are the cost of maintaining Hong Kong's institutional system.

The good news is we may soon find solutions for these problems. The development of Guangdong-Hong Kong-Macao Greater Bay Area will provide more room for development of the technology industry, which in turn can enhance social mobility. The Greater Bay Area could also help ease the land shortage in Hong Kong. The Greater Bay Area project is another example of the "one country" factor benefiting the SAR - by helping promote social upward mobility.

As an open and free society, it is normal to have different views on political and social issues. Having a common vision is important. Before 1997, the common vision could be a "better Hong Kong". After Hong Kong's return to the nation, the issue of Hong Kong not only concerns 7.3 million local residents but also the 1.3 billion compatriots on the mainland. The common vision should be expanded to "better nation, better Hong Kong". President Xi Jinping said: "During the last 20 years, 'one country, two systems' has proven not only to be the best solution to the Hong Kong question left over from history but the best institutional arrangement for Hong Kong's long-term prosperity and stability since its return." In other words, "one country, two systems" is the best practice to cultivate the common vision.

(HK Edition 06/30/2017 page1)