In this Aug 8, 2019 photo, people wave the Chinese national flag and the flag of the Hong Kong Special Administrative Region(HKSAR) at a pier in Tsim Sha Tsui of Hong Kong, south China.(PHOTO / XINHUA)
Placing Hong Kong’s contribution to national economic development at the front and center, respected figures of the special administrative region brainstormed how the city could channel its hard-earned wisdom to help boost the Chinese mainland’s real estate market, trade, as well as cross-border asset flows in a seminar of Friday.
Hong Kong’s real estate market has gone through a baptism of fire, ending with a wealth of experience and a formula for success through trial and error, said Leung Chun-ying, vice-chairman of the National Committee of the Chinese People’s Political Consultative Conference, said during the seminar held by the One Country Two Systems Research Institute.
Regulating indemnificatory housing, which can be distinguished from commercial housing, is central to ensuring the security of people’s livelihoods
Having passed the test of time, Hong Kong’s tried and tested strategies in the housing market will be useful for the mainland, he added.
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Regulating indemnificatory housing, which can be distinguished from commercial housing, is central to ensuring the security of people’s livelihoods, the HKSAR’s former chief executive said.
“Housing and property represent the most prized cumulative asset of residents,” said Leung, who cautioned that property market ills could cause further problems in people’s livelihoods, well-being, the economy and governance.
Inflation, the trigger to unsettle a firm economy and and financial risks, should be kept at bay, he said. The housing market in all but a few regions is riddled with “real estate speculation”, which upsets the balance of supply and demand.
Having been plagued by destructive profit-driven behavior, Hong Kong has come a long way in solving the puzzle with the introduction of the stamp duty, Leung said. He said he will encourage the mainland to seek its equivalent answer, taking a leaf out of Hong Kong’s stamp duty, which has paid dividends in regulating the real estate market.
He said monitoring housing vacancy rates on a regular basis is another important lesson that Hong Kong’s housing market has learned and this will serve as a reference point for the mainland to better manage how to balance demand and supply.
“It’s a reliable touchstone to keep track of the real time housing demand,” Leung added.
Regretting that mutual exchange and studies of the Hong Kong and the mainland real estate markets have gone quiet since the mid-1990s, Leung said he hopes the dynamic of reciprocal sharing can be revived and become an integral part of Hong Kong’s integration into national development.
One of the world’s most significant free ports that is steeped in history and ranked sixth in the world’s leading import countries or regions for 2021, Hong Kong has nurtured an intimate and strategic rapport with numerous import and export merchants worldwide, said Raymond Yip, chief liaison officer of Guangzhou Nansha Service Centre in Hong Kong.
The offshore trade in goods last year generated value of HK$4.2 trillion ($540 billion), exceeding the value of goods involved in merchanting of HK$3.7 trillion, he said.
The pattern of merchanting overtaking the offshore trade has since 2003 been reversed, which speaks volumes for the incremental importance of Hong Kong’s role as a conduit of trade between the mainland and the rest of the world.
Hong Kong possesses many advantages, such as intimate knowledge about the distinctive demand of buyers from different countries, good mastery of English while “speaking the language of business”, expertise in services beyond trade such as fundraising and sourcing, and the capability of tailoring plans for clientele from all walks of life as the city is well tuned to the latest developments in all industries, Yip said.
Cross-boundary collaboration in trade and commerce will reap mutual benefits, catapulting the mainland into a fast track trajectory of overseas trade expansion and sparking global affinity for products “sourced by Hong Kong”, he said.
Hong Kong has buttressed its cachet as a trade fair capital and convention hub globally and in Asia, and endeavors by the Hong Kong Trade and Development Council have borne fruit, Yip said.
“Hong Kong is keen to share our experience with the mainland via training or exchange programs, which is a key step toward for the SAR’s integration into the national blueprint,” he said.
Susie Cheung, co-convenor of Asia-Pacific Structured Finance Association, shed light on Hong Kong’s integration into the country’s overall advancement from the perspective of promoting the city as a securitization financing hub.
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“The significance of cross-border securitization to the development of the mainland economy is profound,” Cheung said. “It can further expand the scale of mainland securitization, which will potentially boost its GDP growth; it can provide an additional source of funds for enterprises, especially helping small and medium-sized companies enlarge financing channels and relieving the burden of costs involved in financing; it is aligned with the national strategies of GBA development, the Belt and Road Initiative and RMB internationalization”
The seminar was well received in the Chinese mainland, with an estimated audience of 300,000 people tuning in the live stream, Leung said.
“The three aspects covered in the seminar today will be the primary three constants for discussion on our ‘integration’ agenda in the coming years,” he said.