BEIJING – Vice-Premier Li Keqiang starts his three-day official visit to Hong Kong on Tuesday, a visit which officials and experts believe signals the central government’s commitment to create more business and investment opportunities.
This is the first time Li has visited Hong Kong since he became vice-premier in 2008.
He is leading a big delegation, which includes heads of the nation’s major ministries – Zhou Xiaochuan, governor of the People’s Bank of China, Chen Deming, minister of commerce, and Zhang Ping, minister of the National Development and Reform Commission.
“This is really a high-profile visit and a large-scale team which consists of many big names in China,” said Chen Wenling, chief economist of the China Center for International Economic Exchanges and a senior expert on Hong Kong issues.
“All sides from Hong Kong are highly interested in Li’s visit this time, and are filled with expectation.”
An important part of Li’s visit is attending Wednesday’s forum on China’s 12th Five-Year Plan (2011-2015) and the economic, trade and financial development between the Chinese mainland and Hong Kong, where he will make a keynote speech and clarify how the region could benefit from the country’s implementation of the five-year plan.
Hong Kong is included for the first time in China’s five-year plan. Premier Wen Jiabao said the central government will help improve Hong Kong’s position as an international financial, shipping and trade center, including developing the region into an offshore yuan center, and promoting closer economic and trade cooperation between the mainland and Hong Kong.
Executive Councilor Cheng Yiu-tong, also a deputy to the National People’s Congress, said Li’s visit might bring good cheer to Hong Kong.
“It is a mutually beneficial five-year plan that will be crucial to future planning for both the mainland and Hong Kong. Since Li is in charge of economic affairs, he is the right person to speak about the national blueprint,” Cheng said.
“And again, the visit of a State official shows the care and support of the central government.”
Li’s visit comes after Hong Kong announced last week that its economy shrank during the second quarter by 0.5 percent, the first time since 2009, as its exports grew at a slower pace. Hong Kong’s export-led economy is likely to enter a year-long recession, said Kevin Lai, economist of Daiwa Capital Markets.
Professor Stephen Cheung, dean of Baptist University’s School of Business, anticipated the forum would be the highlight of Li’s visit.
“The five-year plan clearly opens up many business opportunities and areas of cooperation between the mainland and Hong Kong,” Cheung said.
In 2003, Beijing and Hong Kong signed the Closer Economic Partnership Arrangement after the SARS epidemic had left Hong Kong in the doldrums. Hong Kong is the fifth largest trade partner for the Chinese mainland, and the largest source of the mainland’s overseas direct investment. According to the Ministry of Commerce, Hong Kong contributes 45 percent of the mainland’s accumulative overseas direct investment by volume.
According to an announcement by the Ministry of Commerce released on its website on Monday, Li will witness a ceremony for the release of yuan-denominated bonds, and the mainland and Hong Kong will also sign economic and trade cooperative agreements.
Hong Kong has long been regarded as a global financial center, together with London and New York. Cheung said Hong Kong’s position as a financial center is irreplaceable.
Jonathan Choi, chairman of the Chinese General Chamber of Commerce, said he expects the issue of positioning of Hong Kong could be elaborated this time.
“The city will seize opportunities arising from the new five-year plan to develop into an offshore renminbi center and eye closer economic integration with the mainland,” he said.
“Hong Kong still has the competitive edge, but it’s critical for us to enhance our strengths as an international financial center.”