Ten years ago cartoonists liked depicting Hong Kong as a goose that laid golden eggs, watched eagerly by its uncouth, impatient mainland Chinese master. This image is rarely seen now, given the mainland economy's rapid rise. 'The image is outdated,' said Victor Sit Fung-shuen, a deputy to the National People's Congress and a University of Hong Kong geography professor. 'Things have changed.' That transformation is well reflected in economic figures. Trade and interaction between Hong Kong and the mainland have exploded over the past decade, making their economies the world's most integrated, said Lin Jiang, deputy director of the Centre for Hong Kong, Macau and the Pearl River Delta Studies at Guangzhou's Sun Yat-sen University. But Hong Kong's role had gradually moved from that of the pack leader to a junior partner, he said. Bilateral trade has doubled, from HK$1.116 trillion in 1997 to HK$2.349 trillion in 2006, according to Hong Kong's Census and Statistics Department. Mainland trade now accounts for 46 per cent of the city's total trade, up from 36 per cent in 1997. Hong Kong remains the main source of investment for the mainland, but its importance has dimmed. In 1997, capital from Hong Kong made up 57 per cent of the total foreign direct investment in the mainland. That had shrunk by half, to 32 per cent, in 2006. Meanwhile, the city is becoming increasingly dependent on its neighbours to provide it with jobs, markets and resources. The number of Hong Kong residents working on the mainland increased to 228,900 in 2005 from 133,500 in 1998, according to a 2006 study. Ten years ago, the ability to speak Putonghua was considered a nice, but inessential, job skill; now it is a must for those in the retail, catering, marketing and other industries. 'About 90 per cent of our clients now have business operations on the mainland,' said Andrew Lam, a partner at financial services firm Grant Thornton. 'There are far more mainland firms that hire Hong Kong accountants to handle their businesses than before. This was relatively rare before the handover.' The firm now runs five branch offices on the mainland, and half their workers are recruited locally. 'Hong Kong's fortune is tightly tied to that of the mainland,' Mr Lam said. Many share this view, particularly those in the finance and tourism sectors. Just as more Hong Kong people are heading north for jobs and business opportunities, the flow of people and capital from the mainland into the city has been the main drive in the city's economic recovery. In 1996, only 32 mainland companies listed on Hong Kong's stock exchange, and their initial public offerings raised a total of US$1.67 billion. That seemed like a considerable sum to many at the time, but it was a mere fraction of the US$21.9 billion raised by the Industrial and Commercial Bank of China (ICBC) in Hong Kong last year in what was the world's biggest IPO. The ICBC was not alone: many of the biggest companies that listed in Hong Kong last year were from the mainland, including the Bank of China, which sold US$11.2 billion worth of shares. Thanks to such strong mainland-related business, Hong Kong's stock market, Asia's second largest after Tokyo, has thrived after years of stagnation. Its net profit jumped 88 per cent last year to HK$2.5 billion, its third consecutive record year. 'The biggest change [in the decade] is that mainland China is now more integrated into the world economy and needs less help from Hong Kong,' said Professor Sit. 'Hong Kong, on the other hand, has become more reliant on the mainland.' How did this happen? Feng Xiaoyun, an economics professor at Jinan University in Guangzhou, said the integration process started more than 20 years ago, although the public did not understand the implications at the time. 'The mainland started opening its economy in the late 1970s,' she said. 'This provided opportunities to Hong Kong manufacturers as the mainland offered them unlimited cheap land and labour. Many Hong Kong manufacturers moved their factories to the Pearl River Delta, leaving only an office in Hong Kong.' Throughout the 1980s and 1990s, Hong Kong was the chief provider of capital, technology and management expertise to the emerging mainland economy. It was also the most important bridgehead for foreign companies and investors going to the mainland. 'Hong Kong at the time was very important for mainland China, which was still finding its way in building a market-orientated, modern economy,' said Professor Feng. 'This put Hong Kong in the driver's seat. Many Hong Kong people thought that the mainland needed them more than they needed the mainland.' That was why, in the first five years after the city's return to China, Hongkongers and their government had so many reservations about integrating with the mainland, Professor Lin said. 'Some were worried that Hong Kong's unique identity would be compromised,' he said. 'Some thought closer links would make the Hong Kong economy too one-dimensional. Some feared competition. 'Many mainland cities, particularly those in the Pearl River Delta, were eager to build a better relationship with Hong Kong at the time. They saw it as a channel to get quick access to capital and advanced skills.' Shenzhen, a city built so that the mainland could learn from Hong Kong, led the army of suitors. In 1997, its leaders proposed keeping the border checkpoints open around the clock to speed up the flow of people and goods, but Hong Kong rejected the idea. A second rebuff came a year later, when the Shenzhen government proposed setting up a joint hi-tech development zone. 'Many Guangdong cities felt frustrated, and complained in private,' said Professor Lin. 'They started to plan things without Hong Kong. And gradually, they discovered that Hong Kong was not absolutely necessary, especially as more and more multinationals began wooing the mainland market.' Today, economic powerhouses in the Pearl River Delta like Guangzhou and Shenzhen no longer build their economies around Hong Kong's. Guangzhou thrived on its booming auto industry, thanks to joint ventures with Japanese carmakers. Shenzhen developed a successful hi-tech industry, led by home-grown companies such as Huawei and ZTE. Meanwhile, Hong Kong went through the worst economic downturn in its history between 1999 and 2003. The city's economy began to heal only after Beijing announced a series of economic policies to help it, including the solo traveller scheme that allowed mainland residents from several designated regions to visit Hong Kong freely, and the Cepa free-trade pact. 'The economic downturn was a wake-up call,' Professor Lin said. 'The Hong Kong public started to realise that their fortunes lay with the mainland.' Government and public attitudes underwent a quick 180-degree change. 'The tables were turned after 2003,' Professor Lin said. 'Both Hongkongers and the government realised the importance [of economic integration]. Many of the co-operation initiatives during the second five years were proposed by the Hong Kong side first [including Cepa].' Another example is the construction of a gigantic bridge linking Hong Kong, Macau and Zhuhai. Proposed by some Hong Kong businessmen a decade ago, the idea got little public attention or government support until recently. Now it is a popular topic for media and public discussion. And now it's the Guangdong government that is often blamed for delaying the project. 'Hong Kong people have suddenly acquired a sense of crisis,' said Ronnie Cheung, who runs a factory in Shenzhen. 'While we still have our unique strength and advantages over mainland cities, we can no longer lord it over them like before. 'Now we have to face much greater competition in the mainland market than before. Not only do you have to compete with foreign companies, you also have to face the rising local competitors who are catching up really fast.' A decade ago Shenzhen's economy was just a tenth of Hong Kong's. Last year it was close to half, said mayor Xu Zongheng. With an annual growth rate double that of Hong Kong, it is rapidly closing the gap. Professor Sit said Hong Kong still had many advantages to stay ahead of mainland cities in the near future. But it had to know clearly where its strengths lay. 'Hong Kong now needs to learn how to complement the mainland's development and how to get the most out of it,' Professor Feng said. 'Embracing China is no longer a 'yes' or 'no' question, because China is now a global economic powerhouse.'