Date
14 November 2018
Hong Kong as an independent economic entity under the “one country, two systems” principle would have a key role to play in helping Beijing to break out of the encirclement imposed by the West. Photo: Xinhua/AFP
Hong Kong as an independent economic entity under the “one country, two systems” principle would have a key role to play in helping Beijing to break out of the encirclement imposed by the West. Photo: Xinhua/AFP

Why Sino-US trade war would bring new opportunities for HK

After the launch of economic reforms in 1979, China focused its energy on implementing them throughout the 1980s and early 1990s. Since then Beijing had largely adopted a low profile on the global scene and avoided getting involved in any international conflict on the orders of then paramount leader Deng Xiaoping.

Deng’s predecessors Mao Zedong and Zhou Enlai had also adopted a similar strategy of staying peaceful with other nations.

Deng’s political foresight and brilliant diplomatic strategy set China on a steady course towards an economic miracle.

However, as China’s diplomatic and economic power grew, it could no longer avoid attention and vigilance from the United States.

In order to curb China’s rise to global prominence, the administration of former US president Barack Obama devised the “Pivot to Asia” strategy as a means to contain Beijing.

His successor, President Donald Trump, has taken the containment policy against China to the next level by introducing his “Indo-Pacific” strategy.

He has escalated his containment efforts into a full-scale trade war against Beijing in the name of redressing the huge US trade deficit with China.

So the question arises: What are the implications of the Sino-US trade war for Hong Kong?

I’ll leave the job of number crunching to economic experts, but in my view, whenever China is contained or isolated by the West, new opportunities are created for Hong Kong to make its contribution and enhance its role as the mainland’s gateway to the world.

In May this year, President Xi Jinping urged Hong Kong to work aggressively to transform itself into an international hub for innovation and technology. This is a clear indication that Beijing is attempting to use our city as a hedge against possible western embargoes in the coming days.

With the outbreak of the trade war, the US is likely to go to any lengths to prevent its high-tech products from entering China.

And if that scenario happens, Hong Kong as an independent economic entity under the “one country, two systems” principle would have a key role to play in helping Beijing to break out of the encirclement imposed by the West.

That probably explains why Xi has chosen to designate Hong Kong as another center of innovation and technology even when neighboring Shenzhen is already fulfilling that very role with flying colors.

This article appeared in the Hong Kong Economic Journal on July 21

Translation by Alan Lee with additional reporting

[Chinese version 中文版]

– Contact us at [email protected]

JC/CG

HKEJ contributor

EJI Weekly Newsletter

Please click here to unsubscribe