Neighbours set to eclipse city's GDP
The economies of Shenzhen or Guangzhou will surpass Hong Kong's in the coming decade unless the city speeds up its development, a research institute close to Chief Executive Donald Tsang Yam-kuen says.
Guangzhou's gross domestic product could reach 2 trillion yuan (HK$2.44 trillion) by 2015, with Shenzhen just behind, according to the Bauhinia Foundation Research Centre. Hong Kong would not be able to match that sum until 2020.
Dr Mo Pak-hung, associate professor of economics at Baptist University, said the city's productivity was hampered by excessive bias towards property in creating wealth.
Dr Raymond So Wai-man, dean of Hang Seng Management College's business school, worries that the closer economic ties with Guangdong that many, including the foundation, advocate would not benefit the city's 1.7 million low-skilled local workers. 'Skilled professionals are in high demand, but at the lower end there's few opportunities,' he said.
Based on a population of 12.7 million in Guangzhou and 8.8 million in Shenzhen, the GDP per capita of the two will exceed 240,000 yuan in 2018, slightly ahead of Hong Kong's. The difference would widen by 2020, when the GDP per capita of the two would each exceed Hong Kong's by more than 75,000 yuan, the foundation says.
Since the global financial crisis, Guangdong has invested significantly in heavy and hi-tech industries, areas in which small- and medium-sized firms in Hong Kong lack expertise. It is also developing its service sector, presenting increasingly visible competition to local service providers, according to the institute.
'We are not going as far as saying we are being marginalised. We have to identify areas that we can take on, such as the service industry, finance and logistics,' the centre's chairman, Anthony Wu Ting-yuk, said. Guangdong could harness the expertise of Hong Kong's services sector - including health care and finance - to raise the region's overall standard, he said.
On his recent visit to Hong Kong, Vice-Premier Li Keqiang outlined a plan to open up the mainland market to local service providers by 2017. The institute said concrete targets were needed to achieve full liberalisation.