Beijing focuses on southern China, Hong Kong and Hainan

China relaunched its economy in the second quarter showcasing a GDP growth of 3.2%, with a series of actions in southern China, from introducing the National Security Act in Hong Kong to promoting Hainan Island as the newest Free Trade Zone in China. The Hainan project could be seen as presenting an alternative to Hong Kong's financial system with the aim of creating an economic-financial hub parallel to that of the Special Administrative Region, but in reality, China's strategy is in a different direction.


The Hong Kong SAR is of paramount importance to Beijing; If you compare the flow of FDI investments to mainland China (USD 139B) and to Hong Kong (USD 116B), you can see that the Special Administrative Region is of great importance to China. In addition, China, in the Doing Business ranking of the World Bank, has climbed the ranking to 31st place (above Italy and France) but thanks to the special region of Hong Kong also has the third place overall, after New Zealand and Singapore.

The special region therefore plays a leading role in managing capital flows to and from abroad. Mainland China has tax agreements with 110 countries and regions and while Hong Kong maintains tax agreements with 43 countries; the sum of these leads to more investment strategies and transactions with more benefits and options when compared with the United States which only has tax treaties with 60 countries.

When considering international trade, Hong Kong is ranked in the top 20 busiest ports in the world, along with 9 other ports located on the Chinese mainland, Shanghai, Ningbo and Guanzhou most prominent among them.


In relation to the National Security Act, it should be considered that Beijing has built its growth on two key factors: population and stability; this has led to a pronounced growth gap compared to any other BRICS country. The distance between the other major emerging economies is linked to the success of the long-term strategic plans; China calculates sectors, regions and ways in manners which are ideal for its development in a timely manner.

Hong Kong and its surrounding region remains central to the Belt Road strategy and regional growth, an expanded focus to the southern region brings further stability and thanks to the large population in the Pearl River Delta the economic importance of the region can not be understated.


Guangdong, across the strait from Hong Kong, is China's most populous and richest province in terms of GDP, and the regions with the highest GDP per capita are Macau and Hong Kong. The investment plan in Hainan province confirms the maximum focus on the southern region which includes both the South China Sea and the southern provinces. No crisis can change the importance that Hong Kong has had and will continue to have for China, in the global development of its economy.


Recent articles

© 2020 by RsA Asia Tax Advisors