Fifteen years on, Hong Kong prospers

Two years before Hong Kong's return to China, the Fortune magazine carried a bold prediction -- The return would bring about the city's death.

The city, however, is thriving after 15 years of its return from the colonial rule of Britain.

Over the past 15 years, the Hong Kong Special Administrative Region (HKSAR) has lived through a crippling regional financial crisis, bird flu outbreaks, severe acute respiratory syndromes ( SARS) viruses and a global financial crisis.

Hong Kong's benchmark Hang Seng Index, an important barometer of the city's economic health, climbed nearly 30 percent in the past 15 years. Amid closer ties, trade between Hong Kong and the Chinese mainland hit 283.52 billion US dollars last year, a nearly 596-percent surge from that in 1996.

Donald Tsang Yam-kuen, outgoing chief executive of the HKSAR, was satisfied with what the HKSAR government and Hong Kong residents have achieved over the past years.

Addressing the welcoming dinner the government hosted for visiting Chinese President Hu Jintao Saturday evening, he said the per capita GDP reached 35,000 US dollars at present from 27,000 US dollars in 1997 and unemployment rate went as lower as 3.2 percent.

Hong Kong has been ranked the world's most competitive economy for the second consecutive year, taking the lead in government and business efficiency while remaining a fourth place in economic performance, according to the World Competitiveness Yearbook 2012 released by the International Institute for Management Development in May.

"Hong Kong residents have given their answer to the questions about the fate of Hong Kong after its return to China with their extraordinarily strong will and remarkable achievements," said Tsang at the welcoming dinner.

"What has happened shows that 'one country, two systems' is the right policy for Hong Kong and it is a policy full of vitality," said President Hu on the same occasion.

On the eve of the 15th anniversary, the central government announced a raft of measures to support Hong Kong's economy and further accelerate the city's integration with the mainland.

Detailed policies were announced Friday to foster a special zone in the southern boomtown of Shenzhen neighboring Hong Kong to lead development of financial services and other sectors in a pilot program.

Meanwhile, a new supplementary agreement to the Mainland and Hong Kong Closer Economic Partnership Arrangement was signed to open the mainland market wider to Hong Kong's service industries, which contributed to more than 90 percent of the city's annual economic output.

On the same day, the central government issued 23 billion yuan (3.64 billion US dollars) in yuan-denominated sovereign bonds in Hong Kong to support the city's economy.

The central government also vowed to promote the further development of the offshore yuan market in Hong Kong, which will help secure Hong Kong's status as a major international financial hub.

To this end, more arrangements will be made to encourage the use of the yuan, or Renminbi (RMB), in cross-border trade settlement, yuan-denominated bond issuance by mainland financial institutions and enterprises, offshore yuan trading of foreign direct investment and RMB Qualified Foreign Institutional Investor (RQFII) scheme, and Hong Kong-share ETFs (exchange-traded funds).

Massive infrastructure construction is also speeding. The Hong Kong-Zhuhai-Macao Bridge, when complete in 2016, will be the world's longest cross-sea bridge connecting the city with the Pearl River Delta, an economic powerhouse in southern China. A high- speed rail line linking Guangzhou, Shenzhen and Hong Kong is also under construction, which will cut the Hong Kong-Guangzhou traveling time to just under 50 minutes - halving the time spent on through trains on the East Rail alignment.

"With the strong support of the central government, the firm backing of the mainland and the good foundation that has been built over the past 15 years," the new HKSAR government and Chief Executive-elect Leung Chun-ying will be able to unite all sectors of society and lead them to turn the city into an international metropolis with "economic prosperity, political structural democracy and social harmony," said President Hu, who came to Hong Kong for the third time.

Hu arrived here on Friday on a three-day trip for the anniversary and the swearing-in ceremony of the fourth-term government of the HKSAR on Sunday.

In an interview, Leung said opening to the outside world with the strong support of the motherland is one of Hong Kong's major advantages, which implies enormous opportunities.

Hong Kong is well-positioned to turn itself into an offshore center for RMB business. "RMB-related business will be one of the pillars of the future of Hong Kong as a financial center," Leung said, adding that through the financial industry of Hong Kong, the mainland could boost the process to turn RMB into a convertible currency step by step.

Looking ahead, Leung said he hopes Hong Kong can achieve a higher level of economic and social development, faster growth and better coordination with the mainland in socio-economic development in the next five years, the length of the tenure of a chief executive.

It will be a tough job, but Leung is confident. He said he is ready to face the challenge.