Opinion | HK's role in China's Belt and Road Initiative: A catalyst for high-level opening-up
By Qing Ping
The 2024 Belt and Road Summit from September 11 to 12 is another major event for Hong Kong. As a global financial center, Hong Kong's well-established legal system and strong international connectivity make it a valuable asset in advancing China's ambitious Belt and Road Initiative (BRI) goals. As China strives to enhance international connectivity, promote economic integration, and support sustainable development, Hong Kong leverages its unique advantages to play a transformative role in driving these objectives forward.
Economic Cooperation: Enhancing Trade and Investment Flows
Hong Kong has long served as a gateway for Chinese enterprises entering global markets and as a bridge for international companies seeking access to the Chinese market. As of 2023, over 4,200 multinational companies had set up regional headquarters or offices in Hong Kong, making it a vital hub for global commerce. This interaction represents not only economic exchanges but also a high-level integration of global capital, technology, and expertise within the BRI framework.
As a free port with an independent customs territory under the "One Country, Two Systems" principle, Hong Kong enjoys unparalleled flexibility and competitiveness in international trade. According to the Hong Kong Census and Statistics Department, the city's total trade value reached HKD 8.2 trillion (approximately USD 1.05 trillion) in 2023, marking a 7% year-on-year increase. Re-export trade accounted for 95% of total trade, underscoring Hong Kong's status as a global trading hub.
Hong Kong's advanced infrastructure, including one of the world's busiest container ports and highly efficient airport, further cements its role as a regional and global logistics nexus. In 2023, cargo throughput at Hong Kong International Airport reached 4.9 million tonnes, maintaining its position as the world's busiest cargo airport for several consecutive years. Meanwhile, Hong Kong's port handled 18.4 million TEUs (twenty-foot equivalent units) in the same year, ranking among the top in global port traffic. These characteristics align closely with the BRI's objectives of enhancing regional and global connectivity and promoting economic cooperation. Hong Kong's ability to facilitate the smooth flow of goods and capital is crucial to the success of the BRI, particularly in linking China's economy with those of Southeast Asia, Africa, and Europe.
As one of the world's largest offshore RMB centers, Hong Kong's RMB deposits totaled RMB 940 billion (approximately USD 145 billion) by the end of 2023, providing significant financial support for cross-border trade under the BRI.
Moreover, with its sophisticated financial system and deep capital pool, Hong Kong can facilitate financing for infrastructure projects across Asia, Africa, and Europe. As of 2023, the Infrastructure Financing Facilitation Office (IFFO) under the Hong Kong Monetary Authority (HKMA) had attracted more than 100 entities, including banks, development agencies, and infrastructure funds, highlighting Hong Kong's ability to channel global capital into the BRI. This influx of capital not only supports infrastructure development but also fosters economic growth and connectivity in participating regions.
Financial Innovation: A Hub for Green Finance and Fintech
As the global financial landscape evolves, Hong Kong is positioning itself as a center of financial innovation, particularly in the areas of green finance and fintech, which align with the BRI's emphasis on sustainable development.
In 2023, the Hong Kong Special Administrative Region(HKSAR) Government launched its Green Bond Programme, issuing HKD 100 billion (approximately USD 12.8 billion) in it, making Hong Kong one of the largest green bond markets in Asia. By promoting green finance, Hong Kong not only facilitates financing for environmentally friendly projects but also demonstrates leadership in addressing climate change and promoting global green transitions.
In addition, Hong Kong's burgeoning fintech industry offers innovative solutions to the financial challenges associated with the BRI. For example, blockchain technology can enhance transparency and efficiency in cross-border transactions, reducing costs and mitigating risks. Hong Kong's regulatory environment encourages innovation while ensuring financial stability, attracting numerous fintech companies. According to InvestHK, as of the end of 2023, Hong Kong was home to more than 600 fintech companies, highlighting its potential as a fintech hub within the BRI framework.
Legal and Dispute Resolution: A Gateway to International Standards
Hong Kong's role as a global center for legal and dispute resolution is vital to the BRI. With an independent judiciary and a strong rule of law, Hong Kong is an ideal venue for dispute resolution and legal protection for BRI projects. The HKSAR Government maintains close cooperation with the international legal community to ensure that Hong Kong's legal and dispute resolution services align with international standards, providing crucial legal safeguards for enterprises and investors along the BRI.
A key aspect of Hong Kong's legal sector is its provision of professional services in areas such as project financing, contract drafting, dispute resolution, and cross-border mergers and acquisitions. Hong Kong's law firms and legal service providers have extensive experience in international legal affairs, offering comprehensive legal support for BRI projects. This legal support is essential for ensuring the smooth implementation and success of BRI projects, particularly those involving multiple jurisdictions and complex contracts.
The Hong Kong International Arbitration Centre (HKIAC) is one of the world's most popular arbitration institutions, renowned for its fair and efficient rules. In 2023, HKIAC handled 350 cases, with a total disputed amount exceeding USD 8 billion, reflecting its importance in resolving BRI-related disputes. Additionally, the establishment of the China International Commercial Court in 2018, and its collaboration with Hong Kong under the Greater Bay Area framework, further reinforces Hong Kong's role as a legal core for BRI countries.
Hong Kong can also serve as a conduit for aligning China's legal framework with international standards and practices. As China continues to expand its global economic influence, aligning its legal framework with international norms becomes increasingly important. Hong Kong's expertise in international law can facilitate this alignment, making it an important partner in improving China's legal environment for foreign investment.
Cultural Exchange and Soft Power: Building People-to-People Connectivity
In addition to its economic and legal contributions, Hong Kong plays an important role in cultural exchange under the BRI. As a meeting point between Eastern and Western cultures, Hong Kong's rich cultural resources and unique historical background position it as a key facilitator for promoting people-to-people exchanges among BRI countries and regions.
Hong Kong's universities and research institutions actively establish partnerships with their counterparts in BRI countries, fostering academic exchanges and collaboration. According to the University Grants Committee, from 2017 to 2023, Hong Kong universities signed more than 500 agreements with institutions in BRI countries, covering research, student exchanges, and joint projects. These initiatives help strengthen cultural and educational ties between BRI countries.
Additionally, cultural institutions such as the West Kowloon Cultural District play a key role in showcasing Chinese culture and art to the world. By promoting cultural exchange and dialogue, Hong Kong contributes to building a positive image of China globally, enhancing the soft power necessary for the successful implementation of the BRI.
Through cultural exchange programs, art exhibitions, academic collaborations, and youth exchange initiatives, Hong Kong fosters mutual understanding and cultural integration among BRI countries. These exchanges not only deepen friendships among people but also enhance the BRI's soft power and influence.
In conclusion, Hong Kong's role in the BRI is multifaceted and dynamic, encompassing economic cooperation, financial innovation, legal expertise, and cultural exchange. Hong Kong's unique strengths can contribute significantly to the success of the BRI and to China's high-level opening up. At the same time, Hong Kong will also be able to consolidate and enhance its own strengths in participating in the construction of the "Belt and Road" and achieve better development.
The views do not necessarily reflect those of DotDotNews.
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