Hong Kong told to join forces with Guangdong economy

PUBLISHED : Wednesday, 13 November, 2013, 3:17am
UPDATED : Wednesday, 13 November, 2013, 3:17am

Top Hong Kong officials and businesspeople are calling for a Guangdong free-trade zone to help the city maintain its competitiveness against rivals like Shanghai and Singapore over the next 10 years.

Asked what it would take to create "the next Li Ka-shing", Antony Leung, the city's former financial secretary who now serves as Blackstone's Greater China chairman, urged Hong Kong to join forces with the Pearl River Delta to create future growth opportunities for the city.

"The idea is to give Hong Kong-based businesses and professionals free access to the mainland market through this zone. This zone will be more competitive than Shanghai because what Shanghai lacks is a pool of talent, which is already domiciled in Hong Kong," Leung said in a public forum in Hong Kong yesterday.

"If, with the government's help, medical services, level of education and law [in Guangdong] could somehow be raised to Hong Kong's level and the taxes also brought to Hong Kong's level," he said it would also help solve Hong Kong's land problem.

Echoing Leung, Justin Chiu, non-executive chairman of Fortune Real Estate Investment Trust, controlled by Cheung Kong (Holdings), said: "Hong Kong is becoming marginalised. It has no future if we don't merge with the Pearl River Delta."

But at the same time, ineffective governance, anti-mainland sentiment and lack of innovative industries are costing Hong Kong its edge in the race to benefit from the mainland's new round of liberalisation and hurting the city's future, they said.

The central government announced the setting up of a free-trade zone in Shanghai in September as a key testing ground for innovative policies for the further opening up of the mainland economy, posing more challenges for Hong Kong.

Regina Ip Lau Suk-yee, a member of the Legislative Council, said Hong Kong is "seen by the Chinese leadership as becoming 'unsafe'". Ip faulted the city with a "fear of failure and a blame culture", with a "risk-averse" government afraid of exploring new opportunities.

"Hong Kong has lost a lot of opportunities," said Ip, alluding to the city's reliance on just finance and tourism to power its economic growth. "The real drawback is the political one. The political system is dysfunctional right now."