Hong Kong Young Writers Anthologies Non-Fiction 2020 | Page 32

Non-Fiction – Group 4
business as usual.’’ The first interpretation would put Hong Kong’s judicial independence under
strain, potentially eroding Hong Kong’s financial role as global investors become wary whereas
the second interpretation should leave Hong Kong’s position intact.
To add to the uncertainty, the US has recently passed the “Hong Kong Human Rights
and Democracy Act” in response to the escalating protests. This Act states that there will be
an annual review on the autonomy of Hong Kong. If the US decides it is not up to standard,
not only will they impose sanctions on the Hong Kong/Chinese officials involved but they
could also remove Hong Kong’s special trading status. For example, the exports of American
sensitive technology to Hong Kong would be restricted, just as in the Mainland. This Act
in fact presents a double-edged sword to HK. On the one hand, it does seem to ensure
the continuation of one-country-two-systems because of the potential threat of the loss of
Hong Kong’s special status which would hurt China. On the other hand, if the US views
Hong Kong as no longer enjoying a high degree of autonomy, then Hong Kong will suffer a
double blow because not only would its autonomy be eroded, but it would also lose its “most
favoured nation” status currently granted by the US.
Therefore, whether Hong Kong is considered to enjoy a high degree of autonomy seems to
hold the key to whether Hong Kong will suffer from the worst case scenario of a double blow.
If this happens, the Greater Bay Area will suffer greatly because the ability of the Greater
Bay Area firms to raise USD financing as well as to attract foreign direct investment (FDI)
will be adversely affected if HK’s financial role disappears.
However, this worst case scenario does not seem likely, as both China and the US benefit
from Hong Kong maintaining its status as a global financial centre.
From the US perspective, US companies benefit economically from trading with Hong
Kong. The value of US exports to Hong Kong far exceeds the value of its imports from Hong
Kong, with a surplus of US$ 31 billion in 2018. Given Hong Kong’s trusted common law
system, US companies also feel secure in using Hong Kong as a springboard into China.
From China’s perspective, Hong Kong is an important bridge that links Mainland firms
to the rest of the world. Professor Simon Shen, Adjunct Associate Professor in Political
Economy at HKU & CUHK, points out that investment into China by foreign companies
(FDI) routed through Hong Kong has increased from 40% pre-1997 to 70% because
foreigners have faith in Hong Kong’s common law system. Professor Shen also argues that
Hong Kong has a unique role in China due to the free exchangeability of RMB into other
currencies in Hong Kong, unlike in Mainland China. China’s need for USD financing and its
strict control of the flow of money in the Mainland thus gives Hong Kong an advantage.
Indeed, Hong Kong has always been special in that it has enjoyed a free flow of
information, people and capital, an independent judicial system, a regulatory framework that
is free from corruption and a highly-educated workforce with a good command of English.
All of these are paramount for an international financial centre and none of which the other
Mainland cities can replicate. As long as China values HK’s unique financial role, it is likely
that HK will be left to operate as it has done in the past, at least in appearance.
Yet, China still faces the challenge of some Hong Kong youth who refuse to be
integrated. Since Hong Kong is such a vital part of the Greater Bay Area plan and contributes
so much to China, perhaps the Central Government would consider maintaining the status
quo for Hong Kong on the surface but gradually replacing the pool of local talent with ones
from the Mainland. For example, in Mainland companies or in other spheres where the
Central Government can exert influence, they may adopt a policy to hire only loyal mainland
graduates, bypassing this generation of Hong Kong protestors.
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