HK a center for global standards and regulations

The Chinese mainland's next phase of its opening-up will be driven by institutional reform, and the Hong Kong Special Administrative Region, with its well-established regulatory framework in line with international rules, can serve as a key intermediary in linking standards and practices between the mainland and international companies and organizations.

Commending the SAR's role in the process, Wang Zhile, head of Beijing New Century Academy on Transnational Corporations, a research institute established by the Ministry of Commerce Research Institute and Beijing Fazheng Group, says the city could build a new center of international standards and regulations.

In the first phase of the mainland's opening-up, Hong Kong played the role of a financial and trade center. More than half of China's outbound investment and 60 to 70 percent of foreign investments are conducted through the SAR.

Wang said he believes Hong Kong will continue to play a successful role as a financial center, but its status as a trading hub is declining because of the expansion of mainland ports. Hong Kong's expertise in rules and regulations could become its new avenue for growth, he suggests.

Wang says the mainland's opening-up is guided by preferential policies, while the next phase will be at a higher level and of higher quality, featuring a systemic process that has been identified by the central government in four key aspects - regulations, institutions, management and standards.

Hong Kong's financial enterprises, lawyers and other professionals are well-versed in world rules and standards, making them ideal for the mainland to refer to in the new development stage. He said he believes mainland enterprises can learn about international compliance from Hong Kong, and even mainland local governments can take a leaf from how the SAR has built up its business environment.

For example, Hong Kong has been invited by the People's Procuratorate of Shenzhen's Bao'an district to carry out research on international practices and cases, and advise on the principles of local compliance work.

"Hong Kong can also play a positive role in guiding foreign companies to understand mainland regulations and standards, and establish relationships with mainland companies," says Wang.

As the main beneficiary, Hong Kong can revitalize itself with the new economic driving force, and leverage its expertise in rules and regulations to become a critical player in the nation's next stage of development.