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China's Xi makes use of the keynote speech to advertise Hong Kong integration

Chinese President Xi Jinping

Aris Messinis | Pool | Reuters

BEIJING – Amid uncertainty about Hong Kong's future and China's international relations, President Xi Jinping said on Wednesday that the country continues to seek to do business in its own way with the rest of the world.

Speaking on the 40th anniversary of the establishment of the Shenzhen Special Economic Zone, Xi made sweeping statements reiterating China's commitment to improving the business environment and further opening up to foreign companies, while also pointing out how Hong Kong will become more integrated with the mainland could.

Technology giants such as Huawei and Tencent live in Shenzhen, a city in the southern province of Guangdong. It has become a showcase for more business-friendly practices that have not been used in most of the country.

"Shenzhen should also encourage the development of Guangdong, Hong Kong, Macao – the Greater Bay Area – and enrich the new practice of" one country, two systems "," Xi said, according to an official translation of his Mandarin remarks. He was referring to a policy that enabled the Chinese city of Hong Kong to function as a semi-autonomous region under Beijing's rule.

Xi did not specifically state what the "new practice of" one country, two systems "entailed, but spoke broadly about efforts to promote Shenzhen's economic development and innovation.

Currently, reform is at a new historic point where many unprecedented challenges are emerging.

Xi Jinping

President of China

The Chinese head of state said there should be more cooperation within the Greater Bay Area to attract young people from Hong Kong and Macau to the mainland, "strengthening their sense of belonging to the motherland."

Hong Kong Director General Carrie Lam had postponed her annual keynote address due on Wednesday to first discuss efforts to revive the economy of the semi-autonomous region with the central government in Beijing.

In addition to favorable government policies, Shenzhen has benefited from proximity to local factories and Hong Kong's financial center. In less than 40 years, Shenzhen has become one of the three largest Chinese cities by gross domestic product, according to the widely persecuted Chinese financial journalist Wu Xiaobo.

By 2018, Shenzhen's gross domestic product exceeded that of Hong Kong according to official calculations, based on the annual average exchange rate. Shenzhen's GDP this year was 2.422 trillion yuan, compared to 2.4 trillion yuan in Hong Kong, state-run media China Daily reported.

Hong Kong's economy fell into recession last year as protests became increasingly violent. In the aftermath of the riots, Beijing increased its control over the region through a new security law that heightened international concerns about the growing power of the central government. Xi has taken steps to strengthen the role of the state in the country and removed deadlines for its role.

More talk of corporate reform

"The path of reform never ends. The path of reform is never smooth," Xi said on Wednesday. "Right now, reform is at a new historic point where many unprecedented challenges are emerging. The complexity, sensitivity and difficulty of pushing reforms are no less than it was four decades ago."

"Therefore, with greater political courage and greater wisdom, we must adhere to the combination of crossing the river and feeling stones at the same time and strengthening the design at the highest level," said Xi, referring to a sentence that the former leader said Attributed to Deng Xiaoping.

The world economy is facing complex challenges at the moment … We should not be stopped by reversing trends and tides (reforms and opening up).

Xi Jinping

Chinese President

Deng led the restructuring of China's economy in 1978, paving the way for individual ownership in some industries, and allowing foreign companies limited access. Many credit the policy change for helping lift hundreds of millions of people out of poverty and making China an economic powerhouse second only to the US.

As a result of the coronavirus pandemic and tensions with the United States, Chinese leaders have increasingly been using a vague, new term for economic development in recent months, known as "double circulation", which places greater emphasis on the domestic market .

Xi said Wednesday the political tone does not mean closing China to foreign business.

"Right now the global economy is facing complex challenges," he said. "We should in no way be stopped by reversing trends and tides (reforms and openings) … The new development pattern is not a closed domestic cycle, but an open domestic and international dual cycle."

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