Hong Kong’s Scramble to Regain Lost Lustre

Hong Kong Chief Executive John Lee’s visit to Malaysia in July this year as part of his economic charm offensive reflects the critical need in elevating the state of Hong Kong’s future economic prospects. The transportation, property and related sectors are among the chief parameters discussed with Malaysia, with Hong Kong also eyeing the expertise and structural mobility in Islamic finance from Malaysia.

Eyeing the Middle East and wealthy businessmen and investors from the region, Hong Kong seeks to reinvigorate its finance hub strength and lure, which will need a transformative essence in its current expertise and experience in Islamic finance and banking. Malaysia fills in the gap with ease, which will help Hong Kong in capturing a huge slice of the Islamic finance sector, worth around US$2.2 trillion last year and is anticipated to grow to US$4.94 trillion by 2025. John Lee’s visit to the Middle East early this year clearly reflected that intent.

While trade, cultural and people to people ties between Hong Kong and Kuala Lumpur remain robust, underpinned by the historical connections and appreciation including tourism and the creative industry especially the famed Hong Kong movie and music industries, Malaysia remains one of the primary assets for Hong Kong in shoring up its lost economic lustre. The announcement of the visa free extension for Hong Kongers to Malaysia reflects the intent to foster greater economic returns for both players.

With the various political and economic turmoil that plagued Hong Kong, from the pandemic impact to the lingering aftermath of the crackdown on dissenting movements, it now finds itself on the intersection of holistic salvation and scramble for economic and political stability, in regaining trust and confidence amidst tanking economic confidence.

The exodus of top technological firms from mainland China and with rising focus on emerging markets including Singapore, Vietnam and India have shunned the spotlight on both Hong Kong and Beijing.

Despite the slow and hard recovery, Beijing will need Hong Kong to regain its premier status for two primary reasons. Firstly, to send a message to the world that Beijing will always uphold the principles of rule of law and value-driven governance system with accountability in shoring up its soft power credentials, in giving Hong Kong the enshrined separation of governance system and respect for its special autonomy. Secondly, Hong Kong serves as the ultimate symbol of rejuvenation and pride for Beijing, in regaining its original ownership from the West and as the ultimate revival from its loss to the British in the Century of Humiliation.

The Hong Kong model of one country, two systems will need to be protected at all costs for now for Xi, to portray his credentials in the support for a value-based approach and to stay true to agreed and enshrined principles for Hong Kong, and to shore up his reformist image that has propelled him in the early period of his presidency. However, the squeezing economic decline and the fast closing timeframe to realise his Taiwan and Chinese Rejuvenation of 2049 agenda will limit his options in facing any new potential turmoil in Hong Kong.

For Hong Kong to thrive, it will give the ultimate credence for Beijing to spearhead and win the soft power narrative and as a resilient symbol of national pride that forms the essence of Xi’s Chinese Rejuvenation Dream. Regardless of any future potential outcome or fallout from Taiwan, Hong Kong remains the silent gem for Beijing and as the most critical frontier for both the second front fallback balancer, to the ultimate firstline projection of Beijing’s version and model of a value-based and democratic progressive player that conforms to the moral high ground that supersedes the contours of the West.

Opinions expressed in this article are those of the author.

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