Hong Kong’s status as an International Centre is hard to be replaced

The full text of the decisions (The Decisions) of the Third Plenary Session of the 20^th Central Committee of the Communist Party of China (CPC) has been released. The parts related to Hong Kong, although not much, are noteworthy. It has made two points concerning Hong Kong, with an emphasis on a third point involving Hong Kong and Macao.

The first point mentioned in Article 19, "Improving the Implementation of Regional Coordinated Development Strategic Mechanisms" under Part 5, "Improving the Macroeconomic Governance System," that cites the coordinated regional development strategies of different regions in the country. It mentions "promoting the Beijing-Tianjin-Hebei, Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and other regions should better play their role as a source of high-quality development...improve the regional integrated development mechanism, build a new mechanism for cross-administrative cooperation and development, and deepen industrial collaboration among the east, middle and the west."

This is to expect that the Guangdong-Hong Kong-Macao Greater Bay Area will establish a new mechanism for cross-regional collaboration like other regionals, and serve as a source of power for high-quality growth in support of national economic development.

The second point relates to Article 32, "Perfecting the United Front Work Pattern", under Part 8, "Improving the institution of a Full-Process People's Democratic System", where the phrase "improving the working mechanism for Hong Kong, Macao, Taiwan, and overseas Chinese affairs" is noted.

I believe that the central government wants all links to work together on the United Front.

After its internal situation has stabilized, Hong Kong should be able to play a more active role as an external united front. However, with the situation across the Taiwan Strait being heated, Hong Kong's united front role on Taiwan has declined. But Hong Kong has outstanding overseas links, and the city can now better perform the role of "telling China's story properly."

The most important part in The Decisions that relates to Hong Kong and Macao is Part 7. It is titled "Perfecting the institution and mechanism of opening-up at a high level". There is a paragraph explicitly addressing Hong Kong and Macao, which states that Hong Kong and Macao should "take full advantage of the benefits of the 'one country, two systems' system to consolidate and enhance Hong Kong's international status as a financial, shipping, and trade centre, while the Central Government will support Hong Kong and Macao in building a hub of international top talent, improve the mechanism for Hong Kong and Macao to better participate in the country's opening-up. It also mentions “deepening cooperation in the Guangdong-Hong Kong-Macao Greater Bay Area, and strengthening docking of rules and mechanisms."

This paragraph is short but abounding. It has been a long-term goal to consolidate and enhance Hong Kong's role as a financial, shipping, and trading centre, as well as to strengthen the connectivity with other cities in the Guangdong-Hong Kong-Macao Greater Bay Area. However, at the Third Plenary Session of the Central Committee of the Communist Party of China, new requirements for Hong Kong and Macao were stated.

First, supporting Hong Kong and Macao in building a hub for worldwide high-end talents.

Trump may have a good chance of becoming president of the United States. The pairing of him and the vice-presidential candidate Vance reflects a very anti-China position. The likelihood of China and the United States resuming a trade war will rise, and anti-Chinese sentiment in the United States will be even stronger. Trump created the so-called "China Action Plan" during his last term, with the goal of completely eliminating Chinese “spies” and preventing China from “stealing” American technology. He filed numerous unjust, false, and incorrect cases, which were eventually revealed to be unfounded. Numerous scholars had been wrongly accused and suffered for many years.

It is expected that these events will occur again in the future. Chinese talents in the United States, particularly those in scientific research, may wish to leave the country and pursue opportunities elsewhere. Some may prefer not to return to mainland China directly, making Hong Kong an attractive place for them. From the Science and Technology Parks, Cyberport, to the Productivity Council's various plans that support science and technology investment, as well as the work opportunities of many universities in Hong Kong, the city is poised as an international talent hub to attract top-tier talents from overseas.

 Second, strengthening the mechanism for Hong Kong to play a more active part in the country's opening-up.

The Decisions did not explain how Hong Kong would play its role. However, whether in finance or technology, Hong Kong can play an important part in the country's opening-up in the international arena. Hong Kong not only connects the mainland, but it also benefits from the unique advantages of having two systems in one country. Take finance as an example: because the RMB is not yet freely convertible and the country has foreign exchange controls, funds cannot flow freely in and out. However, Hong Kong is an international financial centre with unrestricted movement of cash and can play a very special role.

The Decisions highlighted accelerating Shanghai's development as an international financial centre, and some speculated that this would pose a challenge to Hong Kong. In reality, Shanghai is not the only one, Hong Kong's competitors include Singapore, London, and New York. Indeed, as previously said, Shanghai, as an international financial centre, has always been subject to stricter constraints because the RMB is not freely convertible. Hong Kong has distinct advantages in this regard.

Numerous countries, such as Brazil, have significant trade surpluses with China. As they gradually trade with China in their own currency, they will accumulate more RMB funds. From the views of a sovereign country, if these RMB are invested in mainland China, approval from the Administration of Foreign Exchange must be obtained before withdrawing the funds. However, if you invest in Hong Kong, whether through RMB deposits or other RMB assets, you can come and go at any time, which is extremely handy. As a result, Hong Kong has an unrivalled advantage in this area.

The conclusion is that the text of the Third Plenary Session's resolution on Hong Kong and Macao is brief, yet substantial. It has important ramifications, whether expecting Hong Kong to attract worldwide high-end talent or play a role in the country's opening-up. Hong Kong must take the chance and act rapidly to reap the benefits of the country's further reform and opening-up, and find a new path for itself.

Wing-hung Lo

Bastille Commentary

** The blog article is the sole responsibility of the author and does not represent the position of our company. **

The New Year barely begins, and Washington drops a flashbang on global diplomacy. A sitting president is forcibly detained and taken out of his own country — a move that blows past diplomatic convention and rams straight into international law’s red lines. On Taiwan, the chatter instantly turns into self-projection, as some people try to shoehorn a faraway conflict into the island’s own storyline. Anxiety spreads fast.

Maduro in cuffs, in a US federal courtroom — the raid’s image problem. (AP)

The South China Morning Post says the US action against Venezuela ignites a fierce debate on the island. Some commentary links the raid to the PLA’s recent encirclement drills around Taiwan, arguing parts of those exercises look, at least in form, like the US’s so-called “decapitation operations”: essentially a leadership-targeting operation. Some American scholars also warn this kind of play could set a dangerous precedent and invite copycats.

“Justice Mission-2025” rolls on as the Eastern Theater Command drills.

That debate doesn’t stay academic for long. It pumps up the island’s unease, with some people asking whether the same kind of military method could one day be copied and pasted into the Taiwan Strait. Even if it mostly lives in public talk, a high-tension political environment turns speculation into something that feels like risk.

People on the island don’t read the US move the same way. A small minority treats it as a US power flex, packed with intel integration, precision strike, and long-range reach. But the more clear-eyed view is harsher: such action chips away at the basic consensus of international order — because if major powers can raid at will and topple other countries’ leaders for their own aims, “rules” stop acting like rules.

Anxiety turns into politics

That worry quickly lands in Taiwan’s political arena. On Jan 5, multiple Taiwan legislators pressed Deputy Defense Minister Hsu Szu-chien at the legislature, asking how he views the US action against Venezuela and whether the PLA might replicate a similar model in the Taiwan Strait. Hsu doesn’t answer head-on. Rather, he merely mentioned preparing and drilling for all kinds of sudden contingencies.

Then he pivots to money. He urges the legislature to pass military budget appropriations quickly and plays up the urgency of delays eating into “preparation time.”

That kind of sidestep, unsurprisingly, only deepened public unease.

SCMP, citing multiple security experts, says the DPP authorities try to play down the association — but outsiders don’t fully rule it out. The reason, those experts argue, is the PLA’s continuing push to improve its ability to shift from exercises to real combat. On the island, that alone works like an anxiety amplifier.

Back in the real world, the PLA Eastern Theater Command has been running “Justice Mission-2025” exercises since Dec 29 last year. Official statements spell out the purpose: a stern warning to “Taiwan independence” separatist forces and external interference, and a move aimed at safeguarding national sovereignty and unification. The message is public and clear, there’s no gray area.

Some US think-tank voices pull a more confrontational takeaway from the US action. American Enterprise Institute senior fellow Hal Brands warns the US raid on Venezuela could create a “demonstration effect,” and he speculates China would watch those tactics closely. Some military commentators on the island seized the moment to hype fears, claiming the mainland might act during a “window” when US power is stretched thin.

That line of talk sounds like analysis, but it functions like a panic pump. US scholar Lev Nachman even says bluntly on social media that if a sudden military action hits the Taiwan Strait, the island could suffer “instant collapse” — not just militarily, but as a psychological shock to society.

KMT Chairperson Cheng Li-wun, in an interview, points to Donald Trump repeatedly stressing a shift of strategic focus toward affairs in the Americas. She says the Venezuela incident should be examined through the framework of international law, and she calls for disputes in any region to be resolved by peaceful means rather than force.

Cheng also reiterates the KMT position: uphold the “1992 Consensus,” oppose “Taiwan independence,” and urge Lai Ching-te to clearly oppose “Taiwan independence,” not touch legal red lines, and avoid continuously raising cross-strait conflict risks.

Rules talk meets reality

International reaction also turns critical of Washington’s approach. Multiple governments and regional organizations speak up quickly, condemning the action as a violation of the UN Charter, which explicitly prohibits using force to threaten or violate another nation’s territorial integrity and political independence. The telling part is the silence: the Western countries that often talk about “international rules” either zipped their mouths, or danced around the question this time.

Reuters says that even though China, Russia, and others clearly condemn the US behavior, the Trump administration is unlikely to face strong pressure from allies as a result. That selective muteness, by itself, drains the credibility of the international order.

On Jan. 5, Chinese Foreign Ministry spokesperson Lin Jian commented again, saying the US actions clearly violate international law and the basic norms of international relations, and violate the purposes and principles of the UN Charter. China calls on the US to ensure the personal safety of President Maduro and his wife, immediately release them, stop subverting the Venezuelan government, and resolve issues through dialogue and negotiation.