The list of co-operative activities between Hong Kong and the mainland on the economic front has been lengthening by the day. No sooner was the ink dry on the Closer Economic Partnership Arrangement (Cepa) than attention switched to joint initiatives for the Pearl River Delta. These are now supplemented by the newly launched Pan-Pearl River Delta Regional Co-operation and Development Forum - what a mouthful. Meanwhile, Financial Secretary Henry Tang Ying-yen has just led a study tour to China's northeast provinces, in a similar vein to the Go West mission in 2001. Of a more specific nature, last year saw agreement on concessions from Beijing to enable Hong Kong banks to conduct some renminbi business, while the list of mainland areas from which individual travellers may visit Hong Kong has been progressively expanded. The catalogue of such initiatives will, no doubt, continue to grow. If we peer behind the pomp of signing ceremonies, ribbon cutting and clinking glasses, what do we find? There is a tendency for such moves to be presented as privileged opportunities for Hong Kong, whether for immediate expansion of trade and business or longer-term investments. Gosh, how lucky we are. And how grateful we should be. But, as one would expect from most measures to promote or liberalise trade or investment, the benefits flow both ways. And arguably, although on reflection perhaps not surprisingly, the mainland may in many instances emerge as a greater beneficiary than Hong Kong. For instance, first, much activity under Cepa relates to services where Hong Kong business will not be so much competing with mainland entities as complementing them. In the process, it will transfer expertise, thus helping to move China up the learning curve as it prepares for the eventual full blast of international competition when liberalisation under the World Trade Organisation is completed. Second, while there may be little shortage of overseas investment into the more prosperous regions of the mainland, the remoter provinces present an altogether different picture; effective infrastructural and entrepreneurial investment is desperately needed there, so it is little wonder that Hong Kong businesses are being wooed. Third, as regards yuan banking, not only are the concessions carefully designed not to undermine Beijing's currency policy, it may also be mainland-affiliated banks which emerge as the main beneficiaries. And fourth, the more liberal outbound tourist regime is a convenient means for the mainland government to satisfy the aspirations of its growing consumer society, in the gradualist manner it favours. As for the more grandiose and visionary initiatives such as the Pan-Pearl River Delta forum, it can certainly do no harm, but whether it can achieve much more than businesses could under their own steam will depend in large part on whether it results in significant improvements to mainland infrastructure and in any genuine easing of bureaucratic encumbrances. For the moment, it floats only on a great deal of hot air, with fine words from Chief Executive Tung Chee-hwa about 'facilitating collaboration', 'fusion of advantages', 'collective synergy', 'a win-win situation', and an exhortation to 'join hands and exert ourselves'. All in all, although the mainland's munificence may be to Hong Kong's advantage, not to mention being designed to keep us happy, it is also aligned closely to its own economic self-interest. Measures to help Hong Kong which might involve some cost to the mainland are less in evidence. The reality behind the rhetoric is that these moves are mostly sensible in economic terms and can be applauded for the mutual benefits they may produce. But, if there are to be profuse expressions of gratitude, they are due from both sides. Tony Latter is a visiting professor at the University of Hong Kong
