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Zhang Dejiang. Photo: Xinhua

Hong Kong's prosperity is tied to rejuvenation of Pearl River Delta

Winston Mok says its open outlook is needed to rejuvenate the PRD

National People's Congress Standing Committee chairman Zhang Dejiang recently said Hong Kong's competitive edge is weakening and may fade away. Its strongest competitors may be other Chinese cities; a recent McKinsey projection indicated that 40 per cent of the 75 most dynamic cities by 2025 will be Chinese. Mainland cities occupy six of the top 10 positions, with Shanghai and Beijing first and second.

Hong Kong is 30th. Yet, Hong Kong's competitive advantages remain unrivalled among China's cities.

Shanghai's economy is already larger than Hong Kong's, and Beijing's is rapidly catching up. By 2025, they are expected to become about 2.5 times the size of Hong Kong's economy. This will be achieved by each increasing its population from 20 to 30 million.

Hong Kong need not be concerned with this ranking; slower growth is only natural as an advanced economy. It remains China's top world city. While Beijing and Shanghai have been rising in the global rankings, it would be hard for them to break into the top 10 without drawing lessons from Hong Kong.

Shanghai and Beijing have good infrastructure and vibrant economies. However, it takes more than scale and gleaming landmarks to become world-class cities. Choking pollution has led to an exodus of expatriates from Beijing. The high cost of living and low quality of life are driving ambitious Chinese professionals to leave. This emigration is driving up world property prices from Vancouver to Sydney.

Beijing, however, has the will to fix its pollution, food safety and traffic congestion problems. China is entering a new phase of development, balancing growth with social development. For education, health care and public housing, it has much to learn from Hong Kong, even though the city is far from perfect in these areas.

Importantly, though, the areas where Hong Kong excels - openness, international orientation and strong civil society - may be the hardest for the mainland to emulate. As an example, foreigners can become permanent residents after living here for seven years. That is almost impossible in mainland China. The key to great cities is attracting and retaining global talent. Shanghai and Beijing have a choice of whether to become more like Hong Kong.

Still, Zhang has a point. Hong Kong has been struggling with its post-1997 identity: how to integrate yet retain its distinctiveness. Its destiny is tied to that of the Pearl River Delta. With the high-speed train link and the Zhuhai bridge, it will be more connected with the delta by 2015. Hong Kong can sharpen its competitive edge by forging even closer economic integration with the delta.

Guangzhou and Shenzhen, ranked much lower than Beijing and Shanghai as world cities, are not Hong Kong's competitors but partners. Their economic dynamism, expected to rank 5th and 6th globally by 2025, would complement Hong Kong's strong international orientation. The three can collaborate to drive the next phase of growth for Guangdong.

Facing a difficult transition from its labour-intensive past, the delta is losing its competitive edge and risks being displaced by the faster-growing Yangtze River Delta. Hong Kong's best bet for growth is to partner with the Pearl River Delta.

Beyond the economic front, Guangdong has been a pioneer of civil society in China. It remains to be seen how much of Hong Kong can be duplicated in Qianhai and then propagated to other Chinese cities. As other Chinese cities advance in the global ranks through a more open and civil society, it is not a cause for Hong Kong to fret, but to celebrate, as this would be its most important contribution to the motherland.

This article appeared in the South China Morning Post print edition as: A delta partnership will ensure HK keeps its edge
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