Hong Kong losing its advantage as China's 'go-between' with world: Report

Hong Kong's advantage as an intermediary between the mainland and the outside world is on the wane, and it is natural for conflicts to emerge between the city and the mainland, says a report compiled by several central government agencies.

These problems will surface as the pace of economic and trade development between the city and the mainland slows, the report on economic and trade co-operation between Hong Kong and mainland China, said.

The paper, published yesterday, was compiled by the State Information Centre, the Hong Kong branches of Xinhua and People's Daily, and Hong Kong-based China Institute of Culture.

Speaking at a seminar on the launch of the report, Dr Fang Zhou, assistant chief research officer at Hong Kong's One Country Two Systems Research Institute, said that to deal with the conflict, the SAR government must improve its economic planning and clarify the city's orientation as China moves forward.

Referring to late US president John Kennedy's famous quote, Fang said: "Hong Kong should not just ask what the country can do for you, ask instead what Hong Kong can do for China."

He was responding to a view in the report that "as Hong Kong and the mainland further integrate in economic and social aspects, some problems and conflicts that were less obvious before will gradually emerge, especially those deep-rooted problems implied in the '[one country,] two systems' concept".

The paper noted that the mainland's direct investment in the city had dropped 8 per cent, from a record US$38.6 billion in 2008 to US$35.7 billion last year.

It said Hong Kong and mainland China must assess the situation "objectively and calmly".

"They must not blame each other, nor be discouraged, nor anxious … and they must definitely not turn to a road of retrogression," the paper said.

While the mainland market was quickly opening and becoming more internationalised thus causing Hong Kong's advantage as an intermediary to wane, the report said, Hong Kong would still keep its other advantages for the long term.

"Hong Kong's core competitive advantages" such as its free market, independent judiciary, graft-free administration and internationalised society "could further stand out," it said.

Meanwhile, Zhang Huiguang, representative of the State-owned Cultural Assets Supervision and Administration Office in Beijing, said the office was willing to "use every channel" to boost co-operation between Hong Kong and Beijing in cultural and creative development.

Speaking at a forum in Hong Kong, she said the two cities had their own advantages.

Hong Kong companies could use Beijing to enter the cultural and creative industries in the mainland, while Beijing could use Hong Kong to spread their influence in the international market.

Zhang, who is also head of the Beijing Tourism Administration, said she had noticed that more Beijing people were visiting Hong Kong after the relaxation of permit rules in September.

Until September 1, Beijing's non-permanent residents had to return to their hometowns to get a permit to visit Hong Kong.