Govt Work Report lays out opportunities for Hong Kong

Premier Li Keqiang delivered on Sunday the Government Work Report (the Report) at the first meeting of the 14th National People’s Congress. Based on the report of the 20th National Congress of the Communist Party of China, the Report comprehensively expounds the central government’s development goals and plans under the strategy of comprehensively deepening reform and opening-up for the coming years. 

The country’s future development is of paramount importance to Hong Kong, which is on the rocky path to the return to normalcy and shaking off the economic and livelihood problems caused by the 2019 riots, COVID-19, suppression and containment of the US-led West, and stagnation of the global economy in the past few years.

The country’s development path outlined by Premier Li takes “seeking progress while maintaining stability” as the keynote, firmly promotes Chinese-style modernization, and adamantly insists on not taking “drastic moves” in various policy areas. Instead, it intensifies well-trodden efforts in key policy areas. The advancement of these key policy areas will bring valuable opportunities for the Hong Kong Special Administrative Region’s future development, so the HKSAR government and all sectors of society must firmly grasp them.

First, the GDP growth target for 2023 is set at about 5 percent, which, if it eventually materializes, would represent a significant increase compared to last year’s actual growth of 3 percent. The Report expects that growth in residents’ income is basically in sync with economic growth. To accelerate economic growth, the central government has adopted a more proactive fiscal policy, with the deficit ratio being set at 3 percent — slightly higher than the 2.8 percent in 2022. The Report also has adopted an active monetary policy. The central government will maintain a basic match between the growth rates of broad money supply and total social financing to support the real economy. Supported by proactive fiscal and monetary policies, the mainland’s economic development will gain pace, providing strong impetus to Hong Kong’s weak economy and helping to restore its vitality.

Second, the Report proposes expanding domestic demand, giving priority to the recovery and expansion of consumption, increasing residents’ incomes, stabilizing bulk consumption, and promoting the recovery of life-services consumption. This means Hong Kong will enjoy a larger mainland consumer market for its high-end products and services, particularly personal services. In this regard, the Guangdong-Hong Kong-Macao Greater Bay Area, a market with a relatively high level of modernization and per capita income, is of great significance to Hong Kong. Hong Kong should adopt policies/measures as soon as possible to get a greater share of this big market. Meanwhile, it becomes vitally important for Hong Kong to comprehensively deepen cooperation and connections with other cities in the GBA.

Third, the Report proposes increasing efforts to attract foreign capital by expanding market access, further opening the modern services industries, implementing national treatment for foreign-funded enterprises, better serving foreign enterprises, and facilitating landmark foreign-funded projects. After Hong Kong resumed normal travel with the mainland, its superconnector role has also been significantly restored. With the global economy still being trapped in deep trouble, China is likely to remain a favored destination for foreign investment, notwithstanding Western media and politicians’ slanders against the city. Hong Kong should proactively contribute to the country’s foreign-investment promotion and provide the needed financial and professional services to foreign investors and talent. To counter the smearing of Hong Kong’s investment environment by the US-led West, Hong Kong should step up efforts to promote its superconnector status.

Fourth, the Report proposes earnestly implementing the principle of the “two unwaverings”. In addition to continuing to attach importance to reforming State-owned assets and State-owned enterprises, it is also necessary for China to protect the property rights of private enterprises and the rights/interests of entrepreneurs with the law, and to support the development of the private sector and private enterprises. The central government pledges to support the development of small, medium and micro enterprises, and to create an environment for fair competition for enterprises of all types of ownership. This policy will create more development opportunities, particularly in the Greater Bay Area, for many of the small, medium and micro enterprises in Hong Kong. Hong Kong, and the financial and services sector in particular, can also provide the financing services and other assistance that private enterprises on the mainland need.

Fifth, the Report proposes accelerating the construction of a modern industrial system, focusing on the key industrial chains of the manufacturing industry, and concentrating resources to jointly advance key core technology research. Hong Kong is now committed to promoting the transformation of its industrial structure and strengthening the importance of innovative technology industries in its economy so that Hong Kong can have a solid foundation for sustainable economic growth. Hong Kong’s high-tech research and manufacturing will therefore be able to benefit from the mainland’s modern industrial system and thereby drive Hong Kong’s traditional industries to become “intelligent” and digital.

Sixth, the Report proposes using government investment and policy incentives to effectively drive social investment so that private capital can supplement the shortage of government investment, thereby accelerating economic development and increasing employment opportunities. The Report also recommends that local governments issue special bonds in the amount of 3.8 trillion yuan ($551 billion) this year; that the implementation of significant projects under the 14th Five-Year Plan (2021-25) be accelerated; that urban renewal actions be implemented; that regional advantages be complemented with each region leveraging on its strengths; and more private capital be encouraged to participate in the country’s construction of major infrastructural projects and “short board” projects (projects in short supply). All these will jointly stimulate the vitality of private investment. This policy will provide valuable investment channels and opportunities for Hong Kong’s abundant funds and will also add dynamics to Hong Kong’s capital market.

Finally, the Report proposes protecting people’s livelihoods and developing social undertakings, including strengthening the construction of housing, upgrading the social security system, developing vocational education in large quantities, promoting innovation in higher education, promoting the expansion and the “sinking” (downward movement) of high-quality resources (to the lower strata), and strengthening elderly-care services, etc. For a long time, civil society organizations, charities, and non-governmental organizations in Hong Kong have played an indispensable and competent role in providing education, housing, medical care and social welfare, and have accumulated much experience. The policy of the central government is to strengthen the use of private resources to promote social development and improve people’s livelihoods in future. With the support and encouragement of the central government and the HKSAR government, Hong Kong’s NGOs should have broad space for operation and development opportunities on the mainland.

The Report emphasizes that the central government will support Hong Kong’s economic development, improve people’s livelihoods, and maintain Hong Kong’s long-term prosperity and stability. These major economic development policies of the central government will accelerate the pace of Hong Kong’s integration into overall national development. As  Hong Kong is now in a stable political situation, the HKSAR government is adopting a more proactive governance mode, and the principle of “patriots administering Hong Kong” has been by and large realized, Hong Kong should be able to do more for its future by developing in tandem with the mainland.

The author is a professor emeritus of sociology, the Chinese University of Hong Kong, and a consultant of the Chinese Association of Hong Kong and Macao Studies.

The views do not necessarily reflect those of China Daily.