A Paradigm Shift Towards a Green and Sustainable Finance Center

7 Hong Kong in Transition: A Paradigm Shift Towards a Green and Sustainable Finance Center At the 25 th Anniversary of the Handover of Hong Kong on 1 st July 2022, also the inauguration of the current Chief Executive John Lee, Chinese President XI Jinping stated that “‘One country, two systems’ is a sound policy. We are looking forward to a bright future. As long as we stay committed to the policy of ‘one country, two systems’, Hong Kong will ‘embrace’ a bright future. … Now Hong Kong is at a new stage of moving from chaos to governance, and then from governance to greater prosperity. … The next five years will be crucial for Hong Kong to break new ground and launch a new takeoff”. The President’s statement marked a new phase for the Hong Kong society and clearly laid out the vision and mission for the current administration. Prior to this, the period of 2018 to 2022 was a hard time for Hong Kong. First, the United States- China Trade War began in January 2018, and it is still ongoing. As the transit hub for China’s re- exports, Hong Kong has naturally been affected. Then, the Anti-extradition Law Amendment Bill Movement (Anti-ELAB Movement ) started in March 2019. Organizers claimed that around 2 million of people joined the march and that was more than one fourth of the city’s population. It made the Anti-ELAB Movement the largest series of demonstrations in the history of Hong Kong. The COVID-19 pandemic outbreak in early 2020, though it indirectly put out the fire of the Anti-ELAB Movement, turned into what UN Secretary-General Antonio Guterres called the greatest global challenge since World War Two. Not until January 2023 did Hong Kong reopen its border to the outside world. The passing of the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region on 30 June 2020 finally resolved the problematic issue raised in the Anti-ELAB Movement, but it has caused another controversy surrounding Hong Kong’s autonomy. All of these incidents and events have had a significant impact on the SAR’s economy. As the city has moved “from chaos to governance”, its approach to the movement from “governance to prosperity” is of critical importance for its future and thus in a heated debate. There are broadly two schools of thought regarding which direction Hong Kong should move in. One school advocates a “Guangdong-Hong Kong-Macao Greater Bay Area (GBA) 2.0” plan. This idea is built upon the 2019 GBA Outline Development Plan. The GBA 2.0 version stresses a further unification of the whole region, including currency, governance system, customs and identity management. One article said, all these four areas should be unified under the umbrella of GBA. The other school, represented mostly by local (former) regulators, entrepreneurs and scholars who have experience living and working in Hong Kong, believe that the coming years for the city should be centered around the international financial center (IFC) idea. Hong Kong should continue to work on its unique “super connector” role and strive to become a middleman that adds super value in the connection process. On the one hand, the GBA 2.0 prescription seems to further strengthen the interconnections of the nine Guangdong cities and two special administrative regions of Hong Kong and Macao. Nonetheless, the detailed measures of unification are promoting the GBA into “one system”, which is against the principle of “one country, two systems”. We must seriously answer the question of why the “GBA one system” would not make Hong Kong more attractive and firmly reject this proposal. On the other hand, Hong Kong’s renowned status as an IFC is widely recognized. Supporters of this IFC rejuvenation plan place emphasis on the numerous advantages that Hong Kong has, such as in the infrastructures of law and finance, free flow of information, its pool of talent, etc. Although this approach strongly sticks to Hong Kong’s unique system and structure, it is “old wine in a new bottle”. Whether the conditions nowadays still sustain Hong Kong’s status as the world’s top three IFC is yet to be examined.