Marching ahead with the nation

Chamber chief calls for more HK-mainland links as nation's economy scales new heights

Hong Kong should strengthen its collaboration with the Chinese mainland and consolidate its role as an international financial center to maintain its long-term prosperity and stability as the world's second-largest economy takes off, urges Jonathan Choi Koon-shum, who heads the powerful Chinese General Chamber of Commerce (CGCC) - one of the city's oldest and biggest business groups.

He has high praise for "one country, two systems", saying the concept has enabled Hong Kong to enjoy a pool of unique benefits over the past two decades.

"Hong Kong is now not only an important metropolitan in our country, like Beijing and Shanghai, but also an international financial center like New York and London," says Choi, adding that the SAR must not miss the boat in seizing the opportunities offered by the country's rapid economic ascent.

The CGCC - a non-profit-making organization founded in 1900 - today boasts a membership of more than 6,000, comprising associations, companies and individuals from a wide range of industries, including manufacturing, financial and professional services, retail and tourism, giving them a powerful voice in the city's business affairs.

It may be recalled that, on the founding of the People's Republic of China in 1949, the chamber unfurled the national flag outside its office in Hong Kong in the first such act by a local business organization.

"It was the post-world war period - the founders and many of the chamber's members had gone through the hardships of war and the idea of having a motherland warmed their hearts," reminisces Choi.

As Hong Kong celebrates the 20th anniversary of its return to the country, many local businessmen who might have harbored a degree of uncertainty about the future have now put the matter behind them as they reaped the enormous benefits created by the central government's unwavering support since the handover, he says.

"Soon after Hong Kong's return to China, we saw the Asian financial crisis and soaring interest rates which had given local businessmen a real hard time. Then came the deadly SARs (Severe Acute Respiratory Syndrome) outbreak in 2003. The central government acted immediately and introduced a string of preferential policies for Hong Kong, such as the Closer Economic Partnership Arrangement, and allowed more mainland people to visit Hong Kong, which helped to revive our retail and tourism business."

Many CGCC members are now doing business on the mainland and were among the first batch of Hong Kong businessman to tap the vast mainland market. Citing his own company, Choi, who is also chairman of Sunwah Group, says they had been involved in the seafood business in Zhuhai and Zhongshan as early as 1979.

According to Choi, Hong Kong enterprises investing on the mainland had gone through various phases.

"When China launched its opening-up policy, many Hong Kong manufacturers had gone to the Pearl River Delta region opening up small factories for the production of shoes, toys and garments. But, as the country transformed itself from a world factory into a major consumer power, our member companies started retail outlets and entered the services industry," he says.

"Today, Hong Kong is capitalizing on its edge as a major financial center to help State-owned enterprises (SOEs) and private mainland companies go out and penetrate overseas markets. Currently, about 50 percent of outbound mainland capital goes through Hong Kong."

As most of the CGCC member companies are small and medium-sized, the chamber has the responsibility to speak for them and help them seek opportunities.

"My members have always asked me why is it that we're not being given equal treatment on the mainland and, every time we send big business delegations overseas, only large SOEs are included. Why is that representatives of Hong Kong companies aren't included as well?"

Choi explains that as relations with the central and regional governments improved over the years, their members' suggestions have been passed on to the relevant mainland authorities.

Choi's interview with China Daily coincided with the announcement that the mainland's A shares have finally been included in the Morgan Stanley Capital Index (MSCI), with 222 large-cap A-shares due to be added to the global benchmark from next year.

He's sanguine about the prospects, saying the MSCI decision shows that the world is accepting China, as mainland enterprises currently account for more than half of total market capitalization in the Hong Kong stock market, and Hong Kong stands to benefit too.

Amid an increasingly competitive environment, Choi says the nation has given Hong Kong a clear direction for future development.

According to the 13th Five-Year Plan (2016-20), the central government will support the SAR in maintaining and improving its status as an international financial, shipping and trading center, and reinforce the city's role as a global offshore renminbi and international asset management hub.

Despite competition from the robust financial markets of Shanghai and Singapore, Choi believes Hong Kong's position as a world financial center is irreplaceable in China.

"Shanghai is an important financial center on the mainland under the socialist system, while Hong Kong's finance market has been developing under the capitalist system and we enjoy a reputation comparable to that of New York and London. Singapore is a third-party country that cannot share the same standpoint with China like Hong Kong does in financial issues," he argues.

Besides preserving its traditional advantages in finance, trade and modern services, Hong Kong needs to diversify its economy and seek new potential in emerging industries like technological innovation.

"As an open world-class market, Hong Kong can create a good platform for global innovative talent and scientific research institutions. The government is planning to build an innovation and technology park with Shenzhen in the Lok Ma Chau Loop to speed up our innovation and technology development."

Choi believes it would be a great strategy if Hong Kong can merge its fundraising capabilities with Shenzhen's innovation strengths to achieve industrial development.

Hong Kong's cooperation with the mainland, he believes, should reach new heights with the Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area projects underway.

"We can take advantage of our long-time association with ASEAN (the Association of Southeast Asian Nations) in boosting cooperation along the 21st Century Maritime Silk Road. And, it's our priority to link up with mainland companies and go out together under the B&R Initiative," says Choi.

Hong Kong, he adds, should combine its soft power as the "super-connector" with the nation's hard power to achieve greater economic progress in the global arena.

The Greater Bay Area plan is also a big opportunity for Guangdong province's economic transition and industrial upgrade, and Hong Kong should play a more positive role in it through coordinated development.

"The Greater Bay Area is key to Hong Kong's future economic development and it should be a priority for us."

Contact the writers at evelyn@chinadailyhk.com

(HK Edition 07/02/2017 page15)