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  • Dec 26, 2014
  • Updated: 9:47am
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POLITICS

Hong Kong losing its competitive edge, Beijing warns

Top official hopes city will forge ahead, but is accused of trying to divert attention from reform

PUBLISHED : Sunday, 28 April, 2013, 12:00am
UPDATED : Sunday, 28 April, 2013, 5:50am

Hong Kong is losing its competitive edge and will be "swept downstream if it does not forge ahead", warns Beijing's man in charge of Hong Kong affairs.

Zhang Dejiang, No 3 on the seven-man Politburo Standing Committee, is by far the highest-ranking figure to voice such concerns.

But one observer believes Beijing is trying to divert public attention from current political controversies over patriotism and universal suffrage.

Zhang sounded the alarm at his first meeting with a political grouping from Hong Kong since taking charge of the Communist Party's leading group on Hong Kong and Macau Affairs.

"Every country in the world is trying to get out of the shadow of the global economic crisis," he told a 31-strong delegation of the Business and Professionals Alliance in Beijing yesterday. "Hong Kong's competitive edge is weakening and will fade away if the city does not put its focus on economic development."

Quoting Deng Xiaoping's warning that "development is the only hard truth", Zhang said: "Only when the economy continues to thrive will livelihoods improve. Everything else is empty talk. Like a boat sailing against the current, it will be swept downstream if it does not forge ahead."

Without elaborating, he said "deep-rooted conflicts in economic development" had begun to emerge in the city.

Zhang's comments came on the heels of a similar warning by Zhou Bo, deputy director of the Hong Kong and Macau Affairs Office, in the city last week.

Professor Chan Ka-keung, secretary for financial services and the Treasury, disagreed that Hong Kong was losing its edge. "The city's advantages are in our own hands," Chan said, citing the legal system and financial market as examples. "[The economy] depends on ourselves after all, but we have the necessary conditions to reach new heights."

Alliance chairman Andrew Leung Kwan-yuen said he saw Zhang's remarks as a reminder rather than a warning. Leung quoted him as saying the coming three years would be crucial.

Leung took aim at the current debate on electoral reform, saying: "The political feud is hindering our competitiveness."

Veteran China watcher Johnny Lau Yui-siu said Zhang wanted to shift the public focus from political reform to the economy.

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This article is now closed to comments

Dai Muff
If Hong Kong wants to push ahead economically, it has to stop relying on outrageous property prices as a sign of economic success. Rent kills hundreds of small businesses before they can even get off the ground. They make it for a year, squeezing a profit, and then a greedy landlord wipes out the whole business by demanding a rent greater than that profit.
johnyuan
Hong Kong was once a vibrant place for business creation. In fact, some of those business that got the beginning in the 70s has grown big and become conglomerate even on international scale. Nevertheless, Hong Kong’s conglomerates are limited. They are limited in creating new products or services. They are limited in expanding local employments. Rather they are individual companies that amass profits through domination of local market. Here we have even a bigger consequence. The cross financial gain allows non-core business to fall behind innovation and at the same time still dominates market. If we take a look at GE of an American conglomerate, each of their sectors within the conglomerate structure exists in its own right with flying color in the Fortune 500. Hong Kong’s conglomerates are just too destructive to the sustainability of Hong Kong as a city of 7 millions. Hong Kong’s future shouldn’t be in the hands of just a few.
ecpath
At last the truth has been said. If HK continue to be run by a group of self serving 'politicians' there will be no more hope but eventual desperation. It is time to kick out those who cannot even speak or behave like an intelligent person and have nothing to show but go on th street or demonstrate.
SpeakFreely
"Professor Chan Ka-keung, secretary for financial services and the Treasury, disagreed that Hong Kong was losing its edge. "The city's advantages are in our own hands," Chan said, citing the legal system and financial market as examples. "[The economy] depends on ourselves after all, but we have the necessary conditions to reach new heights."" Very outdated thinking professor!
Once RMB floated freely HK will have less edge. Despite China donent have a so apcalled legal system as hk but the DFI and VC investment in China is much much bigger than flowing into HK. Investors look at risk and return so it won't bother them. Hk IPO are mainly from china asnwemdofnt have new startup in Hk here. Eventually china will IPO more in SH once RMB fully floated.
Hk without a balance financial and industry plus the high rent will eventually make us uncompetitive. Eventfully chinese will find a better place to shop and buying properties once they are more global. And already happening.
johnrai7
This is obvious but depends on who is saying it, however HK has her own independent and international auditors to analyze this not a politician. Thank you.
lokuohsiung
When you talk about competitive edges, the most tangible competitive edge Hong Kong could offer is a highly educated, motivated and multi-lingual workforce. Unfortunately this has been under assault since the Handover and Hong Kong has yet to recover. When the standard of English in Beijing and Shanghai exceeds that of Hong Kong, you know our days are truly numbered.
constantine
i think hong kong has reached the neck of a bottle and really need a new way out in every aspect. But can we really make a change if many of the senior officials who are responsible in giving short-sighted policy still in charge? As a citizen theres not really much we can do ...
heres the fact
the central government make the appointment => those official behave horribly=> hongkong keep going down year by year bit by bit => people have sentiments and have complaints=> useless policy => hong kong becoming a mess => we ask for universal suffrage => the central government ask me to focus on financial development and look forward = =```
how can hongkonger truely govern hong kong if all of the high ranks are appointed by the central government? we dont think we have a choice law. i have nothing else to say if hong kong is ruined by a government which is selected by ourself. But this is not the case....to be honest, hong kong people and the central government share different value over economy(many aspects indeed)....why dont just let us go and have our fight la...i am quite tired of the chaos in hong kong now.. endless arguments which is not practical...its time to put everything back into order....
lucifer
I assume he is taking Mainland subsidies to state firms and the incentivies, including an undervalued Yuan and tax breaks that have drawn HK business away from Hk to the mainland. After all, its HK's patriotic duty to help the mainland by investing in business there instead of HK, isn't it? The Mainland is in direct competition with high tech busineses here in HK.
If HK's politicians would start focusing on promting business in Hong Kong and stop the destructive effects high property prices, a lack of policy aand support, perhaps HK could take a cue from Singapore and start inevsting in itself and promoting high technology busineses here in HK. After all, we have the best Universities in the region....anyway, what does this Mainland dunce know about anything but CCP party politics?
HK-Explorer
Yes, Hong Kong needs to start focusing on the economy again. Too much focus on universal suffrage, curriculum of high schools and dock workers. People are forgetting about competitiveness and economy. The economies that have been in recession are soon going to start be combining much more conpetitive. HK needs to quickly get off their lazy buts.
joyalsofi
"Only when the economy continues to thrive will livelihoods improve. ..." And yet, if what the scientists say is true, that 2/3 of all energy reserves must remain in the ground in order for humanity to survive, according to the International Energy Agency's 2012 report, one can only listen in horror to these so-called leaders and their continued push for increased, or even maintaining, levels of economic growth with the demise of us all being the certain outcome.

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