Key Political Events in Beijing Highlight Hong Kong’s Strategic Role
The annual “two sessions” of China’s political institutions are set to begin, with the Chinese People’s Political Consultative Conference (CPPCC) starting on Wednesday and the National People’s Congress (NPC) following on Thursday. These events bring together hundreds of Hong Kong politicians and business leaders who have traveled to Beijing for discussions on the city’s future.
Among the key topics expected to be addressed during the sessions is Hong Kong’s role as an international financial center and the progress of the Northern Metropolis megaproject. The two major political gatherings are also anticipated to deliberate and approve the full text of the 15th five-year plan, which will outline the country’s development strategy through 2030.
Focus on Economic Integration and Financial Innovation
Xia Baolong, director of the Hong Kong and Macau Affairs Office (HKMAO), is scheduled to meet local delegates in a closed-door session. Meanwhile, Chief Executive John Lee Ka-chiu will attend the NPC’s opening meeting. Lee has previously stated that Hong Kong will formulate its first five-year plan to align with the national one.
The 15th five-year plan, unveiled last October, emphasizes supporting Hong Kong in becoming a high-end talent hub while reinforcing its position as an international financial, shipping, and trade center. It also calls for deeper integration between Hong Kong and mainland China in areas such as the economy, trade, science, and technology.
Lau Siu-kai, a consultant to the semi-official Chinese Association of Hong Kong and Macau Studies think tank, expects Beijing to highlight Hong Kong’s financial role during the sessions, particularly in advancing the internationalization of the yuan. He noted that China is promoting the use of the renminbi in international trade and investment, aiming to reduce reliance on the US dollar.
“China aims to encourage wider use of the renminbi,” Lau said. “It would not be surprising to see greater emphasis on financial aspects during the two sessions because it is too important for the long term.”
Northern Metropolis and Economic Development
Lau also mentioned the Northern Metropolis, a megaproject near Hong Kong’s border with the mainland, which aims to transform 30,000 hectares of land into new engines for economic growth. If the project is incorporated into the national five-year plan, it would signal Beijing’s strong support for the initiative.
Hong Kong members of the NPC and CPPCC have put forward proposals aimed at aligning the city’s development with the 15th five-year plan. Common themes include strengthening Hong Kong’s role as a finance center and a hub for shipping, logistics, and gold trading.
Henry Tang Ying-yen, a member of the CPPCC Standing Committee, proposed introducing a “dual-counter” trading mechanism in the Stock Connect scheme for mainland stocks. This would allow international investors to diversify their yuan holdings more effectively.
He also advocated for permitting mainland investors to buy Hong Kong stocks in yuan through the trading link. “By utilizing Hong Kong’s offshore capital market appropriately, we can facilitate smoother financing flows between the mainland and the rest of the world while advancing the internationalization of the renminbi,” Tang said.
Gold Trading and Regional Collaboration
Andrew Yao Cho-fai, an NPC deputy, proposed developing a “combined port” strategy in the Greater Bay Area, directing freight from Nansha and Shenzhen ports to Hong Kong to help maintain the city’s cargo throughput. He also urged Beijing to encourage state-owned enterprises and mainland banks to settle physical gold deliveries in Hong Kong, along with relaxing declaration and taxation requirements for gold purchases by mainland tourists.
“By enhancing appeal to international investors, Hong Kong can help improve China’s influence in the global gold market,” Yao said.
Rock Chen Chung-nin, another NPC member, sought Beijing’s support for developing Hong Kong into a gold trading hub. His proposals included establishing a bullion reserve, diversifying yuan-denominated gold products, and optimizing the tax environment.
In January, Hong Kong signed an accord with the Shanghai Gold Exchange to establish a cross-border clearing platform. This move aims to strengthen the city’s position as a global gold trading hub and capitalize on the current market boom for the precious metal.
