The interdependence between Guangzhou and Hong Kong can be traced back to the days when the former was a bustling commercial city and the latter a newly established trading concession. Hong Kong has long since become an international trading hub in its own right but the relationship now is no less important or symbiotic. The arrival in Hong Kong of Guangzhou Mayor Zhang Guangning and more than 200 businessmen should provide a fresh opportunity to discuss how to take the partnership in a mutually beneficial direction. Hong Kong's role in Guangdong province for the past several decades has been well defined. As providers of billions in private investment capital, Hong Kong industrialists and bankers have triggered the region's transformation from rural backwater to workshop to the world. Along the way, they have reinforced Hong Kong's role as a transport hub and provider of the financial, logistics and marketing services which are crucial to the health of Guangdong's export-oriented industries. But that role will have to evolve as cities such as Guangzhou develop their own capabilities for dealing directly with the outside world. How Hong Kong responds will in large part determine the city's future prosperity. Many of our advantages, of course, remain and they should be trumpeted far and wide - and made known to the Guangzhou delegation. That some of the officials and businesspeople are hoping to lobby for tax and other incentives while here indicates that we have been failing on this front. With one of the lowest corporate tax rates in the world, few investment restrictions and virtually no import tariffs, Hong Kong has low barriers to investment from anywhere in the world, Guangdong included. When these factors are combined with iron-clad legal protection for contracts and property, sophisticated capital markets and a workforce familiar with doing business with the outside world, the incentives should speak for themselves. But assuming that they do is not enough. By the end of last year, only 84 mainland companies had set up regional headquarters in Hong Kong, and 148 had established regional offices. This is a far cry from the 10 per cent of Guangdong's 240,000 private businesses that officials were talking about luring to Hong Kong when a campaign to promote the city as a gateway to international markets began two years ago. The Guangzhou visit is a perfect chance to reinforce the advantages of doing business through Hong Kong. Moreover, if the message is to be conveyed effectively, such visits should not be so rare. The element of competition cannot be discounted or ignored. Guangzhou, after all, was a thriving trading and population centre when Hong Kong was still a fishing village. The former's ambition to reclaim its former glory is understandable and achievable. What is more, Hong Kong can benefit by playing a role in the transformation. In Shenzhen, for instance, Hong Kong's MTR Corporation is playing a role in building a new railway. The ambitions of Guangdong's cities do not have to mean a reversal of fortunes for Hong Kong. But we should not expect business decisions to be made on political grounds, regardless of Beijing's insistence on co-operation. It has to be understood that any decisions made by municipalities and companies will be rational ones, based on economic benefit and self-interest. Hong Kong can appeal to both by playing up what it has to offer and showing that the benefits go both ways. Guangzhou's rise should be looked upon as a challenge for Hong Kong to reinvent itself. We could waste a lot of precious time worrying about more competition or we can get to work building the services, consumer and leisure industries that a prosperous Guangzhou will want. And we will need to convince the members of this and other Guangzhou delegations that economic development is not a winner-take-all proposition.