Chinese President Xi Jinping
Aris Messinis | Pool | Reuters
BEIJING — Amid uncertainty about Hong Kong’s future and China’s international relations, President Xi Jinping maintained Wednesday that the country remains intent on doing business with the rest of the world, in its own way.
In a speech commemorating the 40th anniversary of the establishment of the Shenzhen special economic zone, Xi made broad statements reiterating China’s commitment to improving the business environment and opening further to foreign enterprises, while indicating how Hong Kong might be integrated more into the mainland.
Shenzhen, a city in the southern province of Guangdong, is home to technology giants such as Huawei and Tencent. It has become the poster child for more business-friendly practices which so far have not been deployed through most of the country.
“Shenzhen should also promote development of Guangdong, Hong Kong, Macao — (the) Greater Bay area — and enrich the new practice of ‘one country, two systems,'” Xi said, according to an official translation of his Mandarin-language remarks. He was referring to a policy that has allowed the Chinese city of Hong Kong to operate as a semi-autonomous region under Beijing’s rule.
Xi did not specifically state what the “new practice of ‘one country, two systems,” entailed, but he spoke generally about efforts to boost Shenzhen’s economic development and innovation.
The Chinese leader said there should be more cooperation within the Greater Bay Area to attract young people from Hong Kong and Macao to the mainland and so “increase their sense of belonging to the motherland.”
Hong Kong Chief Executive Carrie Lam had postponed her annual policy address due on Wednesday, in order to first discuss with the central government in Beijing about efforts to help revive the economy of the semi-autonomous region.
In addition to favorable government policies, Shenzhen has benefited from its proximity to local factories and the financial center of Hong Kong. In less than 40 years, Shenzhen has surged into the ranks of the top three Chinese cities by gross domestic product, according to the analysis of Chinese financial journalist Wu Xiaobo, who is widely followed.
By 2018, Shenzhen’s gross domestic product surpassed that of Hong Kong based on the annual average exchange rate, according to official calculations. Shenzhen’s GDP was at 2.422 trillion yuan that year, compared to 2.4 trillion yuan in Hong Kong, state-owned media China Daily reported.
Hong Kong’s economy fell into recession last year amid protests that turned increasingly violent. In the wake of the unrest, Beijing strengthened its control of the region with a new security law that has added to international concerns about the growing power of the central government. Xi has taken strides to strengthen the state’s role in the country, and abolished term limits for his role.
“The road of reform is never ending. The road of reform is never smooth,” Xi said Wednesday. “Currently reform is at a new historical juncture, with many unprecedented challenges emerging. So the complexity, sensitivity and difficulty of pushing forward reform are no smaller than four decades ago.”
“Therefore, we must with greater political courage and wisdom, stick to the combination of ‘crossing the river while feeling stones’ and strengthening top-level design,” Xi said, referencing a phrase attributed to former leader Deng Xiaoping.
Deng led the restructuring of China’s economy in 1978, paving the way for individual ownership in some industries and allowing foreign companies limited access. Many credit the policy change for helping lift hundreds of millions out of poverty and turning China into an economic powerhouse that now ranks second only to the United States.
In the wake of the coronavirus pandemic and amid tensions with the U.S., Chinese leaders in recent months have increasingly raised a vague, new term for economic development called “dual circulation” that puts a greater emphasis on the domestic market.
Xi on Wednesday said the policy tone does not mean closing China to foreign business.
“Currently the world economy is confronted with complicated challenges,” he said. “By no means should we be stopped (from reform and opening up) by the reversing trends and tides … The new development pattern is not a closed domestic cycle but an open domestic and international dual cycle.”