The annual Boao Forum held in Hainan last month and hosted by President Xi Jinping turned out to be a highly successfully international event.
That’s not only because it featured a star-studded lineup of political and economic heavyweights from around the world, but also because it was during the Boao Forum that the Asian Infrastructure Investment Bank (AIIB) was officially founded.
The AIIB has 44 founding members, including almost all the major economic powers in Europe and the Asia Pacific, with the notable exception of the United States and Japan.
The establishment of the AIIB is among the most important strategic moves in China’s latest international development initiatives, often known as “One Belt, One Road”.
In fact the significance of the AIIB is often compared to that of the World Bank and the Asian Development Bank, founded by the US after World War II to help rebuild Europe and Asia.
It is generally believed that by subsidizing infrastructural development projects across Asia, China hopes to strengthen its political and economic influence in the region and facilitate the overseas expansion of its state-run and private enterprises.
The AIIB is a necessary tool to fulfill that gigantic blueprint.
China has already injected US$50 billion into the bank, and so as to attract more countries to join it in the face of a US-led boycott, Beijing agreed not to seek veto power on the governing board.
Without question, Hong Kong remains the one and only international financial center in China, thanks to its mature system and rule of law.
It will be decades before Shenzhen or Shanghai can replace Hong Kong.
If Beijing really wants to facilitate the overseas expansion of its “red capital” and turn its companies into truly influential multinational corporations, Hong Kong is the only city on Chinese soil that can play the role of a bridge.
Therefore, if Chief Executive Leung Chun-ying is really concerned about the long-term interests of Hong Kong, then he should endeavour to persuade Beijing to let Hong Kong become the operations center of the AIIB, rather than waste so much time setting up useless consultation committees.
Hong Kong has everything it takes to become the AIIB’s operations center: the human resources, the financial expertise and know-how, plus the international network.
Suffice it to say Hong Kong proved itself to be an unshakable financial hub by successfully repelling the onslaught of international speculators entirely on its own at the height of the Asian financial crisis in 1997.
As an international financial center that has stood the test of time, if Hong Kong can eventually become the AIIB’s operations center, that will not only reinforce its status as an international financial hub but might also give it an edge over New York and London in the decades ahead, when China becomes the largest economy in the world.
Hong Kong has its unique advantages, such as freedom of information, rule of law and a flourishing service industry. All these combine to make us an irreplaceable city in China in the foreseeable future.
I can’t think of any other places across China that can fulfill the necessary criteria for becoming the operations centre of the AIIB.
Compared with some of the Hong Kong government’s extravagant infrastructural projects, like the proposed third runway, which is going to cost HK$141.5 billion of taxpayer’s money, the cost to make the city the AIIB’s operations center would be almost zero.
It would provide a lot of job opportunities and attract talent from around the globe, as well as have far-reaching positive implications for our economy.
The math just couldn’t be simpler.
If Leung really cares about the future of our city and has the public’s best interest at heart like he claims, what he should do is stop being so obsessed with political struggle and stop picking fights with the pan-democrats and making provocative remarks.
Instead, he should put his efforts into convincing our leaders in Beijing that it will be a win-win option for the mainland and Hong Kong if the operations center of the AIIB is located here.
If Leung really wants to redeem himself, he should waste no time doing that right now.
This article first appeared in the Hong Kong Economic Journal on April 10.
Translation by Alan Lee
[Chinese version 中文版]
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