GBA Brief

What Hong Kong’s extradition row says about its place in the GBA

Two weeks of tumultuous protest have forced Carrie Lam, Hong Kong’s chief executive, to suspend indefinitely a controversial bill that would allow people to be extradited to mainland China.

After a turbulent 10 days, Hong Kong’s government has pressed pause on its hugely contentious extradition bill. It had argued that the law needs to be changed to close loopholes allowing cross-border criminals to evade prosecution. But opponents saw the changes as further erosion of the territory’s autonomy from mainland China. The row also has reverberations for Hong Kong’s role in the GBA.

Historically Hongkongers haven’t been that politically minded, putting more of their energies into wealth creation. However, changes in the city’s relationship with the mainland have been inevitable because of years of juggernaut growth in the Chinese economy. Hong Kong’s GDP was still about a fifth the size of China’s when the British handed the city back in 1997 – today it’s about a fiftieth.

Of course, that should make the Greater Bay Area even more important to Hong Kong’s prospects, even as a smaller slice of an ever-growing pie. But while Hongkongers are hoping for an economic boost from closer ties with their neighbours, they want to protect the arrangements that mean they are governed separately. Under ‘one country, two systems’, the territory is guaranteed a high level of legal and political autonomy until 2047. 

Champions of the GBA argue that Hong Kong’s differences can work in the plan’s favour, emphasising the city’s excellence as an international financial centre and its continuing role as a ‘super-connector’ between China and the wider world. Indeed, the differences are described as a crucial addition to the mix, bringing a diversity that rival city clusters in China will never be able to offer. 

The challenge is how to lay a claim to being such an important member of the club, while also insisting on staying slightly apart from it. While new roads, bridges and railways are binding Hong Kong ever more tightly into Guangdong’s much bigger economy, this month’s unrest suggests that plenty of Hongkongers want to stay rather more separate politically (and legally). 

Most economic ‘clusters’ around the world share a common legal system, for instance, but the events of the past fortnight have underlined that this isn’t the case in the GBA and that hundreds of thousands of Hongkongers are prepared to take to the streets to keep it that way.

Such are the sensitivities that contributors at a conference attended by the Brief in May called for a change of terminology in how Hong Kong partners with the rest of the region, arguing that it was better to talk about ‘interacting’ with the other cities rather than ‘integrating’ with them. 

It’s not just semantics. Another potential risk in pursuing a fuller form of integration is that other countries look differently at doing business with Hong Kong, no longer regarding it as separate enough from China.

For instance, US laws currently recognise Hong Kong’s special situation, allowing American firms to operate there in a way that is different to their business dealings in China. But the warnings from Washington in recent weeks were that this status isn’t set in stone and that decisions like the amending of the extradition laws could see a revisiting of the relationship, with business with Hong Kong treated in the same way as with China.

That would trigger some major changes to trade and investment flows into the city, which could have a shuddering impact on business confidence. And it would also be bad for the Greater Bay Area, which needs to draw on Hong Kong’s unique set of capabilities if it is to reach its full potential.