In his recent visit to South China, Xi Jinping declared Shenzhen the key to the Greater Bay Area development. He also conferred Shenzhen the new mission to substantiate One Country Two Systems in the “new era.”

Why on earth does Shenzhen have anything to do with One Country Two Systems? By creating contradictions and confusion to undermine Hong Kong’s special status, Xi wants Shenzhen to replace Hong Kong as China’s international financial center.

Xi does not take One Country Two Systems as a solemn undertaking. In the eyes of Xi, One Country Two Systems is nothing but a convenient lie, a diplomatic mumbo jumbo that does not bear any legal implications.

Despite the wishful thinking, Shenzhen lacks the legal institution to become a financial center. The absence of the rule of law is also the Achilles' Heel of the CCP. Without the rule of law, business people can only rely on trust with each other. Chinese businesspeople often speak of Guanxi as the basis of trust. However, for the rest of the world, the spirit of the contract is the “Guanxi” that enables business dealings.

A financial market without a functioning legal institution will end up a refuge for fraudsters, on where no legitimate business person will set foot.

According to Lu Yue, a veteran Chinese journalist, behind closed door Xi Jinping greenlighted State-Owned Enterprises' to attract talent at all costs.

Money can perhaps buy many things, but it cannot buy talent. Even the most extraordinarily competent ones cannot perform the most simple task unless they can work with each other. The basis for such cooperation is a mutual trust under the law.

Without the rule of law, Shenzhen will remain a backwater isolated from the global economic ecosystem. It is impossible to conjure out of nothingness the circumstances for nurturing the talents for financial business, let alone making Shenzhen an international financial center.

Hong Kong’s institutional strengths as a financial center took over a century to establish. However, Xi, in just one blow, wasted everything we cherished. The imposition of the National Security Law revealed his arrogance and ignorance of the rule of law.

In the past two decades, Shenzhen no doubt has nurtured a few high-tech companies such as Tencent, Huawei, and ZTE. The feat, however, would not be possible without Hong Kong as the facilitator. Hong Kong provided a safe harbor for the free exchange of capital, information, and talents and afforded everyone equal protection under the law. Hong Kong opened the door to the world for Shenzhen.

With the Damocles' Sword, the National Security Law, hanging about, will foreign experts and researchers feel safe to work in Hong Kong, China? Without the protection under the law, how can businesses enter into contracts buy and sell technologies and know-how? The US Sanctions restrict China’s access to technology and the expertise from technologically advanced nations, such as Japan and Europe, hence effectively barring China from taking part in the technological race. How can Shenzhen fulfill the mission tasked by Xi to become the Silicon Valley of China?

Whether it is the imposition of the National Security Law, the mishandling of Hong Kong, or the whimsical call to replace Hong Kong with Shenzhen, these propagandas show Xi Jinping’s ignorance on how the economy and society function. He surmises as long as there is a plan, the so-called determination, and sufficient resources, the CCP can build from the ground up a new international order and make Shenzhen a global center for technology and financial business. If these mind tricks can do magic, how come Shanghai, which the central government loves so much, has not replaced Hong Kong as an international financial center? Why do other special economic zones, for instance, Xiamen, Shantou, and Zhuhai, lag behind Shenzhen by such a margin?

Hong Kong had the institutions for the rule of law and freedom of information, which Shanghai lacks. Shenzhen can take advantage of its proximity to Hong Kong, provided our institutions are intact. It was the reason why Shenzhen succeeded and Xiamen, Shantou, and Zhuhai did not. Xi Jinping neither sees the evidence nor learns from history but indulges himself in the Marxist historicism. Xi wants to lead the Chinese back to Mao’s dark age when imperialism and feudalism were presented as progressive nationalism. The absurd delusion that Shenzhen will one day be a global technology and financial center follows the same illogical abduction.

The West did not consciously design and construct the international economic and political order. No matter whether it is East or West, no one had such wisdom for building such a grand scheme of things. The international economic and political order is the culmination of wisdom through societal evolution. The West is not particularly wiser; they adopt freedom and democracy simply because these social arrangements proved to bring good results. The empiricist approach made them wise.

The emergence of private law, private property rights, and other institutions to protect individual freedom did not have an explicit, designated objective. The rules were often ideas accidentally discovered for solving circumstantial problems. Eventually, ideas became rules, and rules evolved into institutions.

We do not even fully understand the relationship between the institutions and the results they bring about. However, as long as we observe the rules and leave the institutions intact, we can reasonably expect society to function independently. Everyone faces different circumstances, from which they possess unique knowledge; market prices allow each individual to make the most out of the limited resources one has. The market mechanism coordinates our efforts and shares our knowledge, even though we are incognizant of such delicate division of labor. We are wiser and more efficient than we would be thanks to the market for bringing us together.

It is a fatal conceit for Xi to believe that he can idealistically create a whole new world, let alone building Shenzhen into a global financial center to replace Hong Kong by squandering on schemes for attracting talents.

Xi does not respect the rule of law. He does not even understand how the global economic and political orders function. His hubris fatal flaws made China the enemy of the world, triggering the sanctions. Instead of fostering growth and prosperity, he impedes China’s economic and technological development. He is arrogant and ignorant, but it is the people who are paying. How much longer can the Chinese people tolerate him?

(Jimmy Lai is the founder of Next Digital, which publishes the Apple Daily and Next Magazine in Hong Kong and Taiwan.)

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