The United States is wielding the tariff bludgeon recklessly, severely disrupting the global trade order and triggering turbulence in financial markets worldwide. China has mounted a series of forceful countermeasures against American bullying, including tariff and nontariff restrictions.
As a separate customs territory, Hong Kong can play a unique role in helping the country fend off the US’ tariff and trade war. It holds significant potential in this regard in at least four key aspects:
First, serving as a “control valve” in Sino-US trade. On April 5, Hong Kong Financial Secretary Paul Chan Mo-po unambiguously stated that the city steadfastly supports and practices a free-trade policy, and will continue to maintain zero tariffs on all imported goods, including American products, in the face of the US tariff offensive. By maintaining a zero-tariff policy, Hong Kong in effect constructs a “control valve” for Sino-US trade.
In 2024, the total value of Sino-US trade reached $688.3 billion, with the Chinese mainland importing $163.6 billion worth of goods from the US, some of which are considered “essential and irreplaceable” for the mainland. After the mainland slapped reciprocal tariffs on US goods in response to US President Donald Trump’s recent tariff policies, mainland importers are facing prohibitive costs if they import these products directly from the US. Instead, they can import these products through Hong Kong tax-free. Hong Kong’s free-port status affords the country an extra tool for countering the US trade war.
Second, serving as a demonstrator for China’s institutional opening-up. The US government enforces reciprocal tariffs against 185 trading partners, laying bare its unshackled protectionist strategy. In contrast, China is pursuing a national policy of promoting high-level opening-up, with an emphasis on institutional opening-up, which seeks to ensure “national treatment” for global enterprises operating in China, among other policy measures. The Hong Kong Special Administrative Region is well placed to play the role of a demonstrator for institutional opening-up.
Hong Kong’s regulatory frameworks in finance, healthcare, food safety, intellectual property, and consumer-rights protection not only demonstrate sophistication but maintain full international compatibility. The mainland may simply replicate these regulatory frameworks or systems, or innovate upon them. Given the mainland’s thriving internet economy and rapidly advancing new energy sector, institutional innovations can be achieved through the approach of “combining Hong Kong regulatory frameworks with mainland industries”.
Hong Kong can contribute to the nation’s institutional opening-up by leveraging the Guangdong-Hong Kong-Macao Greater Bay Area as a strategic entry point. In the first step, the HKSAR’s institutional models will be transplanted into the four zones of Qianhai, Hengqin, Hetao and Nansha for pilot and refinement purposes. In the second step, the tested models will be extended to fully cover all nine mainland cities in the Greater Bay Area for further trial and refinement. In the third step, the models that have been further refined in the second step will be gradually applied to other regions on the mainland.
By serving as a demonstrator for institutional practices, Hong Kong will contribute significantly to advancing the nation’s institutional opening-up. The HKSAR’s governance team and various sectors of society must proactively seek ways to facilitate this opening-up.
Third, serving as the capital pool of last resort for mainland enterprises. US Treasury Secretary Scott Bessent stated in a media interview that Washington has not ruled out any policy options against China, including the possibility of delisting Chinese companies from US stock exchanges.
There were 286 Chinese firms listed on US exchanges as of March, with a total market capitalization of $1.1 trillion. Should Bessent’s threat materialize, it would affect these enterprises’ investing and financing activities.
A US listing is attractive to Chinese companies mainly because of three advantages: The process of getting listed is relatively short; it offers a dynamic financing ecosystem; and it helps enhance global brand recognition.
These strengths of the US stock market are exactly the ones that Hong Kong strives to attain in order to consolidate and enhance its status as an international financial center. When Hong Kong’s equity market can also offer mainland enterprises these advantages, serving as a capital reservoir for them, Washington’s delisting threat will be muted.
Fourth, serving as a “strong magnetic field” for professionals. Under the pretext of safeguarding national security, the US suppresses foreign talent in a systematic way. A recent Nature survey of 1,608 scientific researchers revealed that 75 percent of them were contemplating leaving the US, driven by two push factors: drastic federal cuts to research and development funding; and reentry restrictions and visa revocations.
The US’ strengthening trend of talent repulsion presents a window of opportunity for Hong Kong to position itself as a premier destination for high-caliber global talent.
As a highly internationalized metropolis, Hong Kong possesses a wide array of favorable conditions for attracting talent. While leveraging these advantages, it is equally imperative for the city to formulate targeted strategies for talent recruitment, utilization, and retention — thereby cultivating a powerful “magnetic field” for high-caliber international talent.
The author is vice-chairman of the Committee on Liaison with Hong Kong, Macao, Taiwan and Overseas Chinese of the National Committee of the Chinese People’s Political Consultative Conference, and chairman of the Hong Kong New Era Development Thinktank.
The views do not necessarily reflect those of China Daily.
