It is a relief that Beijing has acknowledged that its sees Shanghai as the nation's main international finance and shipping centre. Geography, even more than politics, was always going to make it the natural choice. So, removing the illusions of Hong Kong's leaders should at least make us think harder about our future role.
There are the party faithful whose aim is for Hong Kong to become the posh suburb of Shenzhen. But for those who have rather higher ambitions for the special administrative region, it is a good time to consider whether Hong Kong's greatest assets - its openness and internationalism - are under threat, not just from pollution but from xenophobia masquerading as patriotism.
The recent police shooting of a Nepali may have simply been a one-off tragic event. But the muted response of most of the media, often given to hysterics over minor food-additive problems, was a reminder of the discrimination that some Asians, particularly of subcontinental origin, often suffer. Imagine the outcry if a Hong Kong migrant to Vancouver had been gunned down like this. China is not the only rising Asian country and if Asia's 'world city' is to live up to the name, it had better start changing some attitudes. One example: promote trade by allowing Bangladeshis to visit visa-free - or at least make the visa applications quicker.
Next: avoid blaming foreigners for your own failings. Take, for example, the recent nationalistic comments by one South China Morning Post columnist on these pages. He accused foreigners of being responsible for the mayhem in HSBC shares, which he said was caused by the closing auction system. In fact, if Hong Kong had followed other exchanges with a random, rather than fixed, auction time, this would not have happened.
He claimed that Hong Kong was a casino for foreigners, suggested that the Exchange and Clearing be nationalised and its board and committees filled with 'those who have local and national interests and security at heart'. In fact, the Hong Kong government already controls most appointments to the HKEx board, as well as to the Securities and Futures Commission, and recently used its clout to force a HKEx cave-in to the insider trading interests of tycoons.
Does the columnist want to return to the days before the 1987 crash closed the stock market and wiped out the futures exchange, then run by - and for - a local business clique? Or to the days when almost no companies from outside Hong Kong were listed? Given that mainland H-share listing, mainly aimed at non-Hong Kong investors, now comprises a major portion of turnover, such 'patriotism' is a recipe for rapid decline.
Nor does it help foreigners to combat irrational, anti-China sentiment elsewhere when Hong Kong commentators exaggerate its existence. Another columnist recently claimed that 'many US and British pundits' had found a 'Chinese face' to blame for the recent derivatives disaster. The supposed 'punchbag' was David Li Xiangling, a mathematician working for investment banks who invented a formula for valuing certain complex derivatives. It was suggested that he is being singled out because he is Chinese.
An internet search reveals only two references in widely read media, one this month in the technology magazine Wired, titled 'The Formula which killed Wall Street' and another in the Toronto Star quoting extensively from Wired. While pointing to the role of Dr Li's formula in the disaster, both articles made it clear that it was misuse by traders and investment bankers that was the problem. Wired quoted the fact that Dr Li himself had told The Wall Street Journal in 2005 that 'very few people understand the essence of the model ... The most dangerous part is when people believe everything coming out of it.'
Paranoia and xenophobia may be natural in a country where open discussion of the role of the ruling party is not permissible, but they are not a major part of Hong Kong's past or present. Is this the future?
Philip Bowring is a Hong Kong-based journalist and commentator