NewsChina: You first came to Hong Kong in 1974. Do you think Hong Kong is as open and competitive as before?
Lord Sassoon: I certainly do. I think many people thought that things would change and Hong Kong would be less competitive, less open, but the great triumph of the last 20 years and the working of One Country, Two Systems is that the rule of law, for businesses, has remained absolutely unchallenged. The vitality of Hong Kong over these 20 years has, if anything, increased. So I firmly believe that the expectations of 20 years ago have been well exceeded. Every year Hong Kong tops international surveys on the cost of doing business. I think that’s as good an indicator as anything of the overall position.
NC: What has One Country, Two Systems meant for Hong Kong?
LS: Well, I speak as a businessman. But what I see fundamentally is the rule of law holding absolutely firm. Transparency of contracting: if you bid for a government contract, it’s a transparent bidding process. Everything works to the highest standards. The judges, as you know, on the court of final appeal, include judges from around the British Commonwealth, and this gives great confidence to business. It’s still a legal framework based on common law, which is the preferred framework for international business around the world. So all of these things mean that Hong Kong remains a great place to do business. The common law of Hong Kong, with the court of final appeal, with Hong Kong and international judges on it: that, for businesspeople, is the heart of the Two Systems approach, and continues to work extremely well.
NC: What about the One Country portion?
LS: Clearly Hong Kong gains enormous strength from being one of the great business and financial centers for the People’s Republic of China, of which it’s a part. Hong Kong is China’s gateway to the world for outbound investment and for internationalisation of the yuan. So those are two ways in which the One Country idea clearly provides a huge amount of business opportunities, and offers a special role for Hong Kong. So we see many mainland State-owned enterprises, fund management businesses and individuals with investments to manage are using Hong Kong as a base.
NC: What changes have you seen over the last few decades? Some Chinese cities are also developing, such as neighbouring Shenzhen, or the eastern port city of Shanghai. Is there a danger that maybe one day Hong Kong’s leading role will be overtaken?
LS: Well, first of all, let’s talk about the Pearl River delta, and then we’ll talk about Shanghai. We had Guangdong Party Secretary Hu Chunhua in London only last week [mid-June] talking about the Greater Bay Area Project. As far as Shenzhen is concerned, it is of course extraordinary what is happening there and in wider Guangdong Province, combining innovation and manufacturing and bringing products to the market very quickly. But still in Hong Kong there are IT and fintech developments going on.
So the hub of the wider Pearl River delta clearly is an area of enormous opportunity and vitality. And the more that can be done to coordinate the planning of transport, of seamless arrangements for the movement of goods and people, the more this will be to the benefit of business right round the delta.
As far as Shanghai is concerned, Shanghai is, and will remain, the largest commercial city of China, combining not only financial and business services, but the headquarters of great companies. It’s a city with a great history. My family had businesses there for many years before the founding of the People’s Republic of China in 1949. It’s always been a wonderful open business city going back well over 100 years. So that’s fine.
But I think there’s plenty of room for Hong Kong alongside Shanghai. Hong Kong has this wealth of talent and a system of commercial law which works for international business. Hong Kong sits between the mainland and Southeast Asia and so it is a platform for people to do business right around Southeast Asia geographically. It’s very well placed. All these things add up to Hong Kong continuing to have a very bright future. But I see it as complementary, in many ways, to Shanghai.
NC: China is promoting the Belt and Road Initiative, a long-term strategy for developing trade relations, not just for immediate neighbours, but also along the routes of the Belt and Road. What kind of role do you think Hong Kong can, or should, be playing?
LS: I fully support and am enthusiastic about the way that the Hong Kong government promotes this initiative. I think what’s impressive is that the Belt and Road focus goes across the public and private sectors of Hong Kong. It clearly has the endorsement of Beijing. The whole rule of law as well as Belt and Road and so on were all endorsed by Zhang Dejiang when he came and made his important speech last year. Incidentally, here we are talking in London, and I think Belt and Road is one of the key areas, along with yuan globalisation, where there is fruitful cooperation, a sort of triangulation if you like, between the mainland, Hong Kong, and London, as the most global of the financial centers. The historic links with Hong Kong are very strong. Now the links between the City of London and Beijing, Shanghai, and Shenzhen are developing very strongly. So the great thing about the Belt and Road is everybody being joined up.
When it comes to Belt and Road projects in third countries, often the services, whether they’re financing, insurance, project management, will be led by essentially British firms, but British firms working often out of Hong Kong. So I think with Belt and Road, it’s great for Hong Kong to snatch a slice of the action as the super-connector.
Often the work is being done already by the likes of HSBC and Standard Chartered on the banking front. Within Jardines we have one of the global insurance brokers, Jardine Lloyd Thompson, which is already insuring Belt and Road projects. Then for project management you have companies like Arup and Atkins, and then you have the law firms, the accounting firms. It isn’t a coincidence that these are British heritage firms. But they’re firms that have been operating for many decades, or generations, in Hong Kong. So Belt and Road is perfectly suited for these firms. Rooted in Hong Kong to be working in third countries with mainland contractors, energy companies, construction, energy, transport, business. Does that make sense?
The CBBC is preaching this message and making sure that British companies understand the opportunity. And it’s beginning to come together in not just “win-win,” but I would say “win-win-win;” UK, Hong Kong, the mainland – everybody benefits. And Hong Kong’s role is absolutely at the pivot of all of this.
NC: So far as CBBC is concerned, you would like to make the best use of the resources and advantages exhibited by Hong Kong to increase business investment both ways, or three ways, or multiple ways.
LS: Absolutely. So CBBC is working very closely now in partnership with a very strong British Chamber in Hong Kong to make sure that all the companies know what the opportunities are, and we can help with reciprocal arrangements to our members. We’re all working very closely together. There’s one small but important other way that this all links together: our Chief Executive from CBBC, who’d been running CBBC for more than a decade, has gone to Hong Kong to become the Director General for the Commerce Department in Hong Kong, promoting inward investment into Hong Kong. So he’s probably now one of the most senior non-Hong Kong, non-Chinese civil servants. There aren’t many, if any these days, being appointed. Why should there be?
There are plenty of Hong Kong people to fill these jobs. But it’s just a small neat illustration of how all this comes together. The man who was running CBBC is now the senior official in Hong Kong promoting Hong Kong as an international investment center. So we all share common aims here. From a Jardine perspective, we want to see Hong Kong thrive. The best results come from the UK, Hong Kong and the mainland working together. We all have a common interest here.