Indeed, there is even a feeling among some that Hong Kong will inevitably be marginalised no matter what as Mainland China’s reform and liberalisation gathers pace and other Mainland cities bypass Hong Kong to establish direct trade and financial links with the world. 3. These people believe our future is doomed and would be eclipsed by the Mainland’s reform and liberalisation. They tend to look back with fond memories of the “good old days” in the 1980s and 1990s when Hong Kong was the sole gateway between Mainland China and the rest of the world. So, I pose this question – Is their reasoning sound? Will Hong Kong become irrelevant as Mainland China opens up? 4. First, let’s look at the changes in the role of Hong Kong as an intermediate trading hub for Mainland China over the past few decades. In 1979, Mainland China’s external trade amounted to a mere $ billion and container throughput amounted to just 30,000 to 40,000 TEUs, which were mostly processed at the Kwai Chung Container Terminal in Hong Kong. By contrast, in 2013, the Mainland’s external trade ballooned 140 times to $ trillion with container throughput up to 190 million TEUs. The throughput at Hong Kong’s container terminals increased more than 20 times from around 1 million TEUs in 1979 to 22 million TEUs in 2013. However, if the majority of the Mainland’s imports and exports continue to be routed through Hong Kong, how many additional container terminals would need to be built?
There are also those who believe that to maintain Hong Kong’s competitive edge, we must be the only conduit for foreign capital going into and out of the Mainland. It means a “single access” model, with Hong Kong as the only link and conduit between the onshore and offshore markets. The rationale for Hong Kong to continue to monopolise the access to the onshore market is understandable. It also serves practical purposes at the initial stage of the renminbi’s internationalisation. But as the renminbi internationalisation progresses, this model is not sustainable in the long run. The aim of opening up the capital account and internationalising the renminbi is to foster general acceptance of renminbi in global trade and investment and as a reserve currency. To promote the extensive use of renminbi by corporations and investors around the world, renminbi business must flourish in different parts of the world. The development of the offshore renminbi market must shift from a “single access” model to a “multiple accesses” model. We pride ourselves as the world’s most important offshore renminbi centre, still far ahead of other centres in terms of the size of the liquidity pool and various financial intermediation activities. But there is no time for complacency. Our task is to consolidate Hong Kong’s unique advantages and leverage our first-mover position by incessantly upgrading our renminbi platform, making it the ideal choice for companies and financial institutions, on the Mainland and around the world alike, to conduct various types of offshore renminbi business.