Editor's note: Right after Hong Kong's return, an unprecedented financial crisis swept across Asia. With international speculators "hunting" around, stock markets were collapsing, and currencies devaluing sharply. In retrospect, many believe the central government offered just the right amount of support to Hong Kong. Then Chinese Premier Zhu Rongji promised that the central government would protect Hong Kong from the financial crisis "at all costs". Meanwhile, under the "one country, two systems" principle, Beijing allowed Hong Kong's monetary and finance authorities to make its own decision in the war battling against international speculators. And that triumph has lay a solid foundation forward for the two deeply bonded. Tune in to CGTN, HONG KONG: Forging an Unbreakable Bond coming soon.

Wang Guan: On July 2 1997, one day after Hong Kong's return to China, a financial crisis began to grip East Asia and Southeast Asia. Hong Kong was among the worst hit. In retrospect, many experts believe the central government, being the backbone of Hong Kong, offered just the right amount of support. Then Chinese Premier Zhu Rongji promised that the central government would protect Hong Kong from the financial crisis "at all costs", including the assurance that it would not join other countries in devaluing the Renminbi to boost export. While sending two Deputy Governors of the Central Bank to the SAR, it asked every Hong Kong-based Chinese-funded companies to help out – a major confidence booster to both markets and investors.

Beijing also expressed support for the Hong Kong dollar's peg to the U.S. dollar. According to Joseph Yam, the former chief of HKMA, Hong Kong's monetary regulator, there was also a standing offer for Hong Kong to use the mainland's foreign reserves of 140 billion U.S. dollars. Meanwhile, under the "one country, two systems" principle, Beijing refrained from intervention. According to then chief executive Tung Chi-Hwa, Beijing ultimately allowed Hong Kong's monetary and finance authorities to make its own decision to declare war on international speculators. With drastic measures to prop up stock prices and stabilize the HKD, the city emerged from the Asian Financial Crisis faster than most of its Asian peers.

From 1997 to 2018, Hong Kong's GDP more than doubled from 177 billion U.S. dollars to 362 billion U.S. dollars. Fast-forward to 2020, bank deposits and foreign currency reserves, two of the main banking indicators, hit record highs. The total stock market capitalization expanded by 25% the same year, to a record high of 6.2 trillion U.S. dollars. As Asia's second-largest recipient of Foreign Direct Investment, Hong Kong is also the world's largest offshore renminbi business hub and the preferred place for international investors to park their funds.

Chen Jiahe: The reason behind the strength of the HKD amid the 1997 Asian financial crisis was the determined will of Beijing. When short-sellers were trying to attack the currency in the foreign exchange market, the Chinese government decided that Hong Kong must not suffer a crash and the prosperity of it may bring future prosperity to the country.

Script: Wang Guan

Editors: Deng Yutong, Hu Jie

Designer: Qi Haiming

Producer: Zhao Yunjie

Supervisor: Mei Yan

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