The key link

Hong Kong must remain useful to survive as a critical piece of machinery in China's modernisation. Hong Kong was able to continue as a British colony because it was useful to the Chinese Communist Party at various times as a refuge, trading port, fund-raiser and investor. How will Hong Kong be useful in the future?

It may require a new mindset. In financial services, Hong Kong's usefulness is evident in ways some people didn't expect. Many assumed Beijing would ensure Shanghai's dominance. However, the reality is that Hong Kong is still uniquely useful.

For example, its special status plays a critical role in enabling all sorts of offshore renminbi business because while it is a part of 'one country', it operates a separate system of market, regulation and law. Beijing can depend on Hong Kong to play a critical part in increasing the use of the renminbi outside the mainland to gradually internationalise its currency so that, eventually, it will become a global settlement, investment and reserve currency.

Moreover, Hong Kong is not only becoming a listing centre for international companies doing business in China and the rest of Asia, it may well become a commodities centre too, with the Hong Kong Mercantile Exchange starting trading next year.

Hong Kong's contribution to the nation's industrialisation from the 1980s is well recognised today. Local entrepreneurs played an important role in the mainland's export production, especially in transforming the Pearl River Delta region into one of the world's most productive manufacturing zones. Hong Kong and Guangdong now have a new mission - to upgrade the regional economy into high-value activities based on management, product design and technological innovations, rather than to compete on price alone.

This mission has a less discussed corollary - the activities must also be resource and energy efficient, and low in pollution. Policymakers in Beijing know that China's development will run up against depleting resources. This means the developed areas must lead the new transformational charge.

This is the part that Hong Kong's decision-makers haven't quite understood yet. Notably, they are still afraid to adopt tight air quality standards, as well as energy and building codes, and more significant carbon reduction targets. This is not because local businesses cannot meet them, but because the government doesn't want to alter its massive infrastructure plans to accommodate tighter environmental standards.

It is right to see cross-border transport projects as being critical to the city's future but it is wrong to think that all the proposals must be carried out to achieve that end. For example, Hong Kong should rejoice that it no longer really needs a bridge linking the city with Macau and Zhuhai, with work on the bridge from Zhongshan to Shenzhen starting next year. The competition will, in effect, cap the toll amount that can be charged by the more costly Hong Kong-Macau-Zhuhai bridge.

More importantly, traffic from Hong Kong will go to Shenzhen and cross over to Zhongshan because the toll will probably be much lower. To drop the bridge project would take tremendous political courage but there would be multiple benefits. It would free up money for other needs, and Hong Kong wouldn't need to build horrendously complex and far-from-ideal road systems to complement the bridge. Hong Kong could also think more smartly about what cross-boundary infrastructure it really needs.

How about an all-weather, frequent rail service connecting Hong Kong International Airport to Zhuhai? This could then connect Hong Kong to the new Guangzhou-Zhuhai line. Rail travel is more environmentally friendly than road use and it takes maximum advantage of the new rail network across the border.

Let the coming of a new year put us in a future-oriented mindset. Hong Kong can be useful by reducing its consumption of resources, increasing efficiency by maximising use of all types of existing infrastructure, and cleaning up pollution.

Christine Loh Kung-wai is chief executive of the think tank Civic Exchange