There are varied understandings of Hong Kong’s prosperity, and even local residents have hugely diverging views on it. From the standpoint of public policy, Hong Kong, a special international financial hub and free port under the sovereignty of China, essentially relates its prosperity to a collective consensus of the city’s stakeholders – Hong Kong residents, investors from outside the city, the Chinese mainland, and its international society.
History shows that Hong Kong’s prosperity carries multifaceted connotations – economic development, income and wellbeing, the rule of law, freedom, democracy and autonomy under the framework of “one country, two systems,” internationalization, and levels of development of the services sector. Among them, economic prosperity is an important cornerstone of Hong Kong’s prosperity.
The prosperity of the city, a free port adopting a linked exchange rate system, rests on two key factors – China’s central government’s support for Hong Kong and recognition of the city by the market and international society. As some Hong Kong observers put it, the Hong Kong Special Administrative Region’s international status is contingent upon the country and international society supporting it simultaneously.
The central government’s support for Hong Kong’s development indisputably serves as a stabilizing factor, while international society’s recognition comes across as a viable factor. Judging by Hong Kong’s global competitiveness hitherto, the city has always been highly recognized across the globe. It has long been placed highly in terms of economic freedom and business climate. Its longtime international recognition underpins Hong Kong’s capacity to attract international capital and maintain its prosperity.
Maintaining the prosperity of Hong Kong becomes particularly important amid trade tensions between China and the US. It should be objectively acknowledged that the international recognition of Hong Kong as a global financial hub is of significance to Hong Kong’s prosperity.
Hong Kong currently implements a linked exchange rate regime, meaning the Hong Kong dollar and its monetary policy is linked to the US dollar and the Federal Reserve’s monetary policy. If it loses its anchor – the linked exchange rate system – the city’s position as an international financial hub will be affected.
It should also be noted that the US could change its policy as regards Hong Kong being considered a separate customs territory. Currently, the US Congress conducts an annual review of the city based on its Hong Kong Policy Act. The review results decide whether Hong Kong’s status as a separate customs territory will continue. Relying on its domestic laws to conduct long-arm jurisdiction globally is a political intervention method the US frequently uses, undoubtedly indicative of the hegemonism the US has long pursued.
Hong Kong is one of the linchpins of the Guangdong-Hong Kong-Macao Greater Bay Area and if there are changes to the city’s international status, an important prerequisite for the development of the Greater Bay Area will be changed also.
It is worth noting that there is an increased chance of the US government playing the “Hong Kong card” amid resumed trade talks with China. As a country that is most adept at strategic research and devising tactics, the US is fully aware of the effect the Hong Kong “stakes” will have and whether it would play this card depends on changes to the city and the US’ balancing of interests.
A countermeasure China can adopt is maintaining the stability of Hong Kong. China’s central government and Hong Kong society are confident that by standing together, they can maintain the city’s stability and harmonious operation.