The opening up process in Mainland China is far from over and economic reforms will continue. This was one of the key takeaways reported by three experts after returning from the Two Sessions in Beijing, who shared their exclusive insights with members at a roundtable luncheon on 21 March.
Anthony Wu, member of the Standing Committee of the CPPCC National Committee, noted that attending the fortnight-long event is a major time commitment. He added that of all the meetings and speeches, the most important was Premier Li Keqiang’s Government Work Report.
Wu reported Li’s acknowledgement that it had not been an easy year as a result of the trade tensions with the United States. But Beijing would not follow the U.S. practice of stimulus, as that would have negative implications down the line. Instead, a targeted package of tax cuts worth around 2 trillion RMB was announced.
“The government hopes this reduction in taxes and fees will stimulate businesses, especially SMEs,” Wu said. “This is a significant cut in taxes and fees, and that is important.”
Wu also highlighted plans for more investment in infrastructure and re-urbanization. Further business-friendly policies include encouraging banks to relax their lending and policies to allow more foreign investment.
“China is concerned about a major economic downturn, and has studied the experience of Japan in the past few decades.”
Wu also noted that the Mainland leadership had emphasised the importance of globalization and peaceful development.
Jeffrey Lam, member of the CPPCC National Committee and the Chamber’s LegCo Representative, also remarked on the increasing focus on the business community.
“I think this is very good as the government is looking to improve its relationship with business at all levels, including encouraging entrepreneurs.”
Lam noted that the Central Government’s attention to the Greater Bay Area (GBA) showed the project’s importance. Specific policies relating to the GBA development have been emerging, such as the new “China Day” rule, which means that less than 24 hours on the Mainland will not be counted as a day’s residence for tax purposes.
“So this means that Hong Kong residents can go on a Monday and come back on a Friday and it will only count as three days,” he explained. “This is very much to our advantage.”
The release of the Foreign Investors Law during the Two Sessions was an important event, Lam said. The new law contains measures that will help level the playing field and addresses issues such as forced technology transfer.
“This shows that China wants to promote a good trading environment for everyone,” he said. “It makes clear provision on areas that foreign investors are most concerned about, and it is important that the Central Government is addressing these concerns.”
Stanley Hui, member of the CPPCC National Committee, said that Li’s Work Report was overall “very pragmatic, very down-to-earth and clear.” Li’s openness in admitting the challenges that China was facing was appreciated by the delegates. An important message delivered by the Two Sessions is that the Central Government remains committed to improving the quality of life of all its citizens.
Hui refuted any concerns that the development of the GBA may lead to Hong Kong being sidelined.
“It is not a question of assimilating Hong Kong into the Greater Bay Area, or of marginalizing Hong Kong,” he said. “Hong Kong’s strength has been important to the opening up of China for the past 40 years.”
The Government Work Report also reinforced the importance of “one country, two systems.” Hui noted that “one country, two systems” has been beneficial not only to Hong Kong, but to the whole country over the past four decades.
Hui added that a key takeaway from the Two Sessions was that these reforms will continue, and there will be a “higher level of opening up.”
“Last year was the special celebration of 40 years of reform and opening up, and it was made clear that this will continue.”