General Secretary Xi Jinping presided over the second meeting of the Central Leading Group for Deepening Overall Reform on Jan 23. He emphasized that this year marks the 40th anniversary of the launch of the reform and opening-up policy, as well as the start of implementing decisions reached at the 19th National Congress of the Communist Party of China last October. He called for concerted efforts to further liberate people’s thinking and broaden comprehensive reforms in a spirit of change and innovation. This will ensure the nation achieves new breakthroughs.
Also at this meeting, the leading group passed a set of suggestions on establishing a dispute-settling mechanism and institution to facilitate the Belt and Road Initiative. Central government leaders decided the B&R dispute-settling mechanism and institution must follow the principle of negotiated agreement, collective effort and shared service. It must be based on the existing judicial, arbitration and mediation systems of our country. It also should properly resolve business and investment disputes between parties involved in the B&R. This should be done in the spirit of equal protection for the legitimate rights and interests of all parties involved, creating a reliable, fair and transparent business environment under the rule of law.
This reminds me of an arrangement for the Hong Kong Special Administrative Region to fully participate in and assist B&R development. The document was signed in Beijing on Dec 14 last year by Chief Executive Carrie Lam Cheng Yuet-ngor and He Lifeng, chairman of the National Development and Reform Commission. It includes central government support for the HKSAR becoming an international center for legal and dispute-settling services in the Asia-Pacific region.
The central government is committed to the arrangement with a formal document on establishing a B&R dispute-settling mechanism and institution. It seems that Hong Kong should accelerate its move to set up an international center for legal and dispute-settling services in the Asia-Pacific. This would be a good start to its active B&R role.
It is my understanding that the central government appointed Teresa Cheng Yeuk-wah as secretary for justice after Rimsky Yuen Kwok-keung resigned partly because of her abundant experience in international business arbitration. This experience will be useful in establishing a B&R dispute-settling mechanism and institution in Hong Kong. Let’s hope Cheng can soon give her full attention to the job, and Hong Kong people give her some time to finally resolve her problem with unauthorized building works.
According to the arrangement mentioned above, Hong Kong will take part in the B&R in four ways.
Firstly the city can serve as an international law and dispute-settling center in the Asia-Pacific. Other examples of services the city provides include cooperation in financing among all parties involved (including providers and receivers of investment) according to established market regulations and supervision rules. Hong Kong is a one-stop platform serving financing operations under the B&R through diversified investment channels, such as initial public offering, bank consortium loans, private funds and bond issuance. Also Hong Kong can be promoted as a green bond market. It can support State-owned institutions in financing through bond issues and in establishing a green-bond certification authority of international recognition.
Secondly Hong Kong will support the Infrastructure Financing Facilitation Office of the Hong Kong Monetary Authority in expanding its role and attracting major clients to facilitate project financing under the B&R.
Thirdly Hong Kong can take full advantage of its modern service industry, such as supporting the city’s role as a professional service provider of feasibility and risk assessment, research and development, financing, planning, design, construction, supervision, management and maintenance for infrastructure development projects under the B&R. Hong Kong can also provide professional insurance services for major infrastructure development projects under the B&R. These include taking full advantage of Hong Kong’s professional expertise in environmental protection and management to provide environmental impact assessments, green building and pollution-control technology services for construction projects under the B&R. These are all aimed at achieving environmentally friendly and sustainable development.
Fourthly Hong Kong should also cooperate with the Chinese mainland and B&R countries. For example, the central government will support Hong Kong in joining forces with qualified mainland institutions in financing B&R green projects by issuing bonds. It will encourage Hong Kong to work with mainland enterprises and financial institutions on construction projects under the B&R. This includes cooperation with local government departments, enterprises and financial institutions in exploring other financing options, such as public private partnership, to kick-start B&R-related construction projects.
It should be noted that some B&R countries exercise the common law system while others practice civil law. To establish Hong Kong as a regional center for international law and dispute-settling services, Hong Kong-based legal professionals need to abandon any prejudices they might have arising from a mentality of common law supremacy. The spirit of modesty and inclusion is vital to all international cooperation, including the four ways mentioned above.
(The author is a senior research fellow of China Everbright Holdings.)
(Published on Page 7, China Daily Hong Kong Edition, January 31, 2018)