IT IS 8PM on a Monday night in the Captain's Bar at the Mandarin Oriental and there is standing room only. The talk - as if there could be anything else to discuss in this bar, this hotel, this city - is money. 'I heard HSBC is really looking to clean up in this market,' says one flush-faced, pin-striped thirty-something to a companion. 'We may have to move [to the mainland] sooner than we would like,' says another. They are hardly alone in this cash-flush financial conduit between the world and China. Hong Kong's investment banking community is looking forward to huge bonuses as firms seem likely to have their best year in a decade. Restaurants are being enriched by padded corporate expense accounts again. Landlords have re-assumed the Dr Jekyll side of their personalities, spiking rents by double-digit percentages as leases come up for renewal. The financial engine of the Pearl River Delta is humming. But to see how this engine is driving growth around the region, a change of locale is needed. At the American Chamber of Commerce's recent ball at the Shenzhen Shangri-La, the talk was about how people had scarcely enough time to visit Hong Kong these days, business was growing so fast. The vast majority in a random sampling had been posted to Shenzhen, Dongguan and Guangzhou from previous stints in Hong Kong. It may be a small sampling of the bigger picture, but when one starts to zoom out, the influence of Hong Kong employers and managers in the delta becomes even more obvious. Amcham Guangdong has seen its numbers more than double in the past year, to over 800. The same goes for the Hong Kong Chamber of Commerce in China, which has slightly more members. Yet even they pale in comparison to the most telling statistics of all: 10 million jobs at 55,000 factories in the delta are financed by Hong Kong investors. For the past few years, these factories have been running on full blast despite the malaise that gripped Hong Kong's domestic economy. Exports and imports have been soaring, driven by massive foreign investment and post-WTO liberalisation. And now, just as it appears the cycle may be turning, with reports of external trade slowing in the wake of disappointing Christmas orders from the US, Hong Kong is awash in cash again, ready to drive another wave of investment into its hinterland. This time, the money is poised to go into something that Guangdong really needs, however: services. Under the terms of the Closer Economic Partnership Arrangement (see article below), 26 sectors of service industries in the mainland economy are being opened to Hong Kong companies ahead of the terms of China's WTO accession. The problem is, though tariff barriers are coming down quickly as deals are negotiated, the details of how companies, goods and services are recognised are taking longer to work out. So although companies are registering for special status under Cepa, their investments are not flowing quite as quickly, analysts and company officials point out. What does seem to have crystallised over the past year is the concept of close, intense collaboration between bureaucrats on either side, to help create an environment in which cross-border business can thrive. 'The first three years [of HK-Guangdong relations] were slow,' says Stephen Lam, Hong Kong's Secretary for Constitutional Affairs. 'But now, the relationship is maturing. The chief secretary meets his counterpart, Guangdong's executive vice-governor, every three months, and we have 17 working groups established at the policy implementation level.' Mr Lam is particularly proud of the Cepa agreement. 'Cepa is as good an FTA [free-trade agreement] as anywhere in the world,' he says. 'We have a bloc that has coalesced ... a regional cooperation mechanism for a regional economy.' Mr Lam is even more excited about the potential for Hong Kong beyond the delta, however, in the form of the Pan-PRD grouping that came to life this year. This will bring a deeper pool of low-cost labour and a bigger market for Hong Kong companies, he says. Whether they are up to the challenge remains to be seen. Some analysts are sceptical, pointing out that most of these companies operating in the delta are not Hutchison Whampoas. 'They are small and medium enterprises,' says David Dodwell, executive director of PR firm Golin/Harris Forrest, 'who may well be missing international opportunities by focusing too much on the vast mainland market.' Others are more optimistic. Sonny Doo, president of the Hong Kong Chamber of Commerce in Guangdong, points to the region's history of collaboration. 'Hong Kong companies know they can succeed here,' he says, 'and the local governments know how important we are to them.'