Southern China’s Hainan province is to form closer ties with Hong Kong and Macau in areas including high technology and professional services, leaders of the three places say.
Hainan and Hong Kong were in important locations for China’s domestic-international dual circulation plan and should increase cooperation to create synergy, Shen Xiaoming, the Secretary of the Hainan Provincial Party Committee, told Hong Kong’s Chief Executive Carrie Lam in a meeting before the 2021 Boao Forum for Asia (BFA), which started on Tuesday.
Shen said the province and Hong Kong should work together in the professional service, aviation and medical sectors. He said Hainan welcomed Hong Kong’s young people studying and working there.
In a separate meeting with Macau Chief Executive Ho Iat-seng, Shen said despite the pandemic, Hainan province had made achievements in many aspects including the retail, education, medical and high technology sectors.
He said Hainan hoped to strengthen its connections with Portugese language countries through Macau while the island and the Asian gaming center should continue to deepen their cooperation in the tourism and high technology industries.
On Tuesday, Boao Forum, which was cancelled last year due to the coronavirus outbreak, opened in Hainan with a theme “A World in Change: Join Hands to Strengthen Global Governance and Advance Belt and Road Cooperation.” It was attended by Chinese Vice President Wang Qishan and more than 2,000 officials and business executives.
“The fate of the world should be controlled by all countries. We should not let one or several countries to set the rules and impose them on others,” President Xi Jinping said in an opening speech through a video. “We should not allow some particular countries to use their unilateralism as a rhythm to lead the whole world.”
“What we need in today’s world is justice, not hegemony,” Xi said, adding that any effort to build barriers and decouple works against economic and market principles, and would only harm others without benefiting oneself.
Xi’s speech was seen as a veiled criticism of the United States’ efforts to reduce dependence on Chinese supply chains and strengthen its economic and military ties with members of the Five Eyes, Japan and Taiwan.
This year’s Boao Forum includes a panel for provincial and municipal leaders in China and ASEAN countries, a sub-forum about Maritime Silk Road and island economy and the free trade zone development in the world. The Hainan government said the forum would serve China’s foreign policy objectives, support the Belt and Road Initiative and build the island’s free trade zones.
According to an article published by the People’s Daily on April 15, Hainan is the best place to develop the deep sea technology as it is surrounded by waters. Strong sun light is an advantage for the island to develop agricultural biotechnology. Hainan should also develop aerospace technology as it is located at a low latitude, which can minimize launch costs.
The article said since 2018, Hainan had started diversifying its economy and stopped relying on the property sector. As of the end of March, the island has about 1,000 high technology firms, four times of the number in 2016. In the five years between 2021 and 2025, Hainan targets having 3,000 high technology firms with the sector’s revenue reaching 1 trillion yuan (US$154 billion) annually.
On April 9, the People’s Bank of China (PBoC) and three other financial regulators released an opinion document with 33 new measures that aim to further open up Hainan’s financial sectors. They said Hainan was the largest economic zone in China and had the advantages to deepen the country’s economic reform and opening-up policies. The new measures include a testing scheme to increase renminbi convertibility for cross-border investments.
Eddy Li Sau-hung, president of the Hong Kong Economic and Trade Association, said the 33 new measures would encourage foreign financial firms to set up offices and form joint-ventures with Chinese banks in Hainan. Li said Hong Kong’s financial institutions should enter Hainan as early as possible to benefit from China’s opening up. He said Hong Kong would strengthen its status as an international financial center by partnering with Hainan.
Liu Yi-liang, chairman of Chong Sai Com Enterprise (Group), said the rising connections between the Greater Bay Area and Hainan’s free trade zone would create synergy and achieve a win-win situation for both regions.
Liu said the Greater Bay Area was a hub for high-end manufacturers and professional service providers and would form a perfect supply chain with Hainan. However, he pointed out that more efforts should be done to integrate the Hong Kong, Macau and Guangdong economies as the three places had their own currencies, tariff zones and legal systems.
In August 2019, the Shenzhen-based Huawei Technologies won a contract to build the China Mobile’s Hainan-Hong Kong International Submarine Cable for 325 million yuan. The project is the first international submarine cable in Hainan province and an important communication infrastructure for the construction of Hainan free trade port.
On March 21, 2021, China Mobile (Hainan) announced that the Hainan side submarine cable had successfully reached Wenchang. The Hong Kong side is expected to be completed in June. The company said the interconnection of Hainan, Hong Kong and Zhuhai will be realized, and Hainan would become a major national strategic service guarantee area.
Zheng Tianxiang, a professor at the Zhongshan University’s Institute of Hong Kong & Macao studies, said Hong Kong could maintain its status as a “super-connector” with the submarine cable connecting Hainan and speed up the development of its 5G, big data and artificial intelligence technologies.
While Hainan continues to open up, three submarine cable projects connecting Hong Kong and the US have been called off since Beijing implemented the National Security Law in Hong Kong on June 30 last year.
Last August, Google and Facebook submitted a revised proposal to the US Federal Communications Commission that it would build an undersea cable – the Pacific Light Cable Network – between the US and the Philippines and Taiwan, instead of Hong Kong.
In September, Facebook dropped its proposal for the Bay to Bay Express Cable System, a submarine cable between San Francisco and Hong Kong. Last month, Facebook said it had decided to withdraw an application to the Federal Communications Commission about its plan, called the Hong Kong-Americas (HKA) project, which would build a fiber-optic cable along the seabed to link California with Hong Kong. The company said the withdrawal was made because of political pressure from the US government.
Political commentator Simon Lau said in an interview with Next Magazine that Hong Kong had become a telecommunication hub in Asia for more than a century since Cable & Wireless plc, a British telecommunications company, built an under-sea telecom cable to connect the city and the West. Lau said an advantage in telecommunication also helped Hong Kong transform from a transportation and trading hub and a currency exchange center to an Asian financial hub.
Lau said with the US government blocking the construction of more undersea cables between Hong Kong and the US, some financial firms would move from Hong Kong to Singapore and Taiwan. He said it remained unclear how Hong Kong would continue to be a global financial center in future.
Meanwhile, Chief Executive Carrie Lam said in an interview with CGTN that Hong Kong had passed the worst time after the National Security Law was implemented to end the social unrest. She said Hong Kong’s economy would grow by 3-5% this year.