It’s that time of year in Hong Kong. On 1 July the public celebrates the anniversary of the reunification with China. (Back in 1997 it was called a ‘Handover’ but today it’s a ‘Reunification’.) This year marks 15 years. According to Gifts.com we should be in line for some Swarovski or other crystal items.
Instead China announced a series of economic gifts to the city. The most notable boosts Hong Kong’s status as an international RMB clearing centre. Mainlanders can open offshore bank accounts in Hong Kong. Hong Kongers can open RMB accounts in China and convert more RMB daily. In the past they could covert CNY20,000 daily. That limit will rise to 80,000 to 100,000 per day.
Beijing will allow “third parties” to use Hong Kong for trade and investment settlement in RMB. Analysts say that a “third-party” could even be London or Singapore. This boosts Hong Kong’s role as a yuan settlement centre. (Please note that RMB [Renminbi], CNY [Chinese Yuan] and Yuan all refer to the same thing – the national currency of China.)
Both markets will be able to invest in each other’s stock exchanges through ETFs (Exchange Traded Funds). That may not take off at the moment as lacklustre stock market performance has removed a number of investors from the market.
Other “gifts” include allowing Mainlanders to board cruises from Hong Kong to global destinations. That will benefit the US$2 billion cruise terminal under construction at the end of the old Kai Tak runway. The Foster + Partners building is taking shape against the Kowloon skyline and is expected to be operational by mid-2013.
Other gifts include policy packages aimed at trade, finance, education, science, technology and tourism.
For some, expectations were high. Hong Kong had become accustomed to large gifts at anniversary time. Yet many of these policy initiatives were already in schedule and few made a large impact. The most welcomed was the opening of the cruise industry to Mainlanders.
Otherwise, Hong Kong is saying a polite thank you with a very small “t” at the front.
Sidebar: Blue Box mistake? Red Box mistake?
My neighbour Jasper seems accustomed to the dog house. He even has short-hand for ways to overcome marital problems. There are blue box problems and red box problems. What’s that mean?
Stay out too late drinking and wake your daughter as you stumble home? That’s a problem best solved by a gift from Tiffany.
Book family holiday tickets for summer on the right date but a month too late, then find out your family will be sweating through a Hong Kong summer? That’s a red box problem. You’ll need to get an “I’m Sorry” gift from Cartier.
His wife hasn’t signaled if his solution is working. I only fear for him the day he arrives with a red box and she has no idea why. That should lead to a feisty discussion!