t’s February 1996, right after Chinese New Year. I’m standing in Tiananmen Square in
Beijing. The Mainland has to wait another year to get back the now so-called crown jewel, Hong
Kong. A very large panel showing a digital clock is on display in the square. The clock is counting
back the seconds so every visitor can see how much longer to go until Hong Kong belongs to the
motherland again. China is excited.
However, in Hong Kong, which means “fragrant harbor”, the mood is very different. Because
everybody. knows what’s going to happen on June 30, 1997, there are mixed emotions among the people
of Hong Kong. Will the ”one country, two systems” policy work? And how will the relations between
Hong Kong and the mainland be? Will Hong Kong lose its competitiveness?
On the other hand, most of the manufacturing has moved from Hong Kong to the neighboring
Chinese Guangdong province, mainly to Shenzhen. And in these emotional moments before the handover,
the economic community of Hong Kong didn’t think of the many problems and obstacles in the
relations with the Mainland.
In Perfect Fit
Ten years later, one thing is clear: Hong Kong is in perfect fit, and the “one country, two
systems” agreement is working. Hong Kong is still the gateway to Asia and the mainland for several
reasons. From a geographical point of view, Hong Kong is at the center of Asia. Within five hours
on a plane, one reaches half of the world’s population.
Hong Kong is a World Trade Organization member, and for the 14th consecutive year was voted
the “freest economy” of the world. The headquarters of 3,800 mainland and international companies
are located in Hong Kong. Licensed banks with offices in Hong Kong total 140.
Probably the most important reason for Hong Kong’s favorable position with China is the new
CEPA agreement. The Close Economic Partnership Agreement (CEPA) demolished more barriers than ever.
From Jan. 1, 2008, the mainland further relaxed the market access conditions in 28 areas. Further
information can be found at