For those of you transfixed by what's going on in the stock market, reading about the death of 30,000 Hong Kong-owned factories across the border following the mainland's new export policy may be considered a waste of time. But I suggest you spare the minutes because history tends to repeat itself. Our financial industry may be the next casualty if we continue to be so unprepared. What do I mean by unprepared? Our low-value processing plants were once loved in the mainland. Our entrepreneurs brought in the then much-needed capital and jobs when Guangdong was technically still a 'barren land'. In return, they earned fortunes. The love has long gone. As early as 2005, state leaders have made it public that they want a cut in pollution and trade imbalance. Yet the production of low-value exports at hefty environmental cost continues to be the core of our factories up north. There has been little upgrade. Neither has the government done much. Back in 2002, the then financial secretary pledged to facilitate our entrepreneurs to enter the domestic market. Other than the establishment of several liaison offices across the country, little has been achieved. In May the bad news finally arrived. Senior Ministry of Commerce officials from Beijing told our officials and business associations of a plan to ask manufacturers to pay as a deposit half the amount they spend importing 1,853 raw materials and to impose export limits on a wide range of low-value goods. The measures will be detrimental to not just the factories but also the supporting business in town - the white-collar workers, the truck drivers and even our ports. Unbelievably, the bombshell did not ring an alarm. Occupied with the 'cabinet reshuffle', our administration got a two-month postponement and little else. When the policy was officially introduced on Monday, we panicked. Three days later, the government said a long-needed working group would be formed not immediately but next week. 'Hopefully, we can buy some time. But given Beijing's concern of trade friction and excessive liquidity, little can be done,' conceded a senior official. This is a typical case of inertia plus prosperity sending us to the wall. But why would this have any relevance to our financial industry? Our system is still leading the mainland's in many aspects. Chief Executive Donald Tsang Yam-kuen has his finger firmly on the pulse. The development of our financial industry is his top priority. We should be more prepared in this area. The first statement will remain true for a while, but I am not quite sure about the latter one. A progress check on the measures proposed by the administration in the report of the mainland's 11th Five-Year Plan and the Development of Hong Kong issued in January will tell you why. The pledge: facilitate the listing of more mainland enterprises in Hong Kong. Fact: mainland regulators are pushing its enterprises into listing at home instead of Hong Kong. Only one Hong Kong-only listing has been approved since last October. The current public offering bloom is being fed by old deals. The pledge: high-level liaison with the mainland be strengthened to facilitate capital formation for mainland enterprises. Fact: new accords have been signed between regulators for better supervision of mainland firms and intermediates. No mechanism of high-level dialogue has been established. In fact, a plea made by our government to Beijing to block the listing of red chips in the mainland is understood to have sent our relationship with mainland securities regulators on a downward spiral. The pledge: attract overseas issuers to list in Hong Kong. Fact: our regulators announce a welcome message but maintain that member countries of international accords will be preferred. Marketing trips have been made. No listing application from an overseas issuer has been received so far. Lawyers said clients remained unsure of the market response and regulatory hurdles. The pledge: expand the range of non-deliverable yuan products. Fact: the Hong Kong Exchanges and Clearing (HKEx) has shelved a study on the products indefinitely due to reservations expressed by mainland regulators. The pledge: develop commodities market here to cope with the mainland's growing raw material demand. Fact: 10 days ago, HKEx appointed a consultant on the feasibility of commodities derivatives trading. This is six months after the proposal was formally made. The pledge: expanding the yuan business service in Hong Kong. Fact: China Development Bank issued a five billion yuan denominated bond which was three times subscribed. Trading is sparse. Another billion yuan issue is scheduled. A promise by Beijing to allow trade settlement in yuan has not materialised a year after it was made. The score card is far from satisfactory. But why worry? We are having a good time with the influx of mainland money. The question is how long this trading on valuation gap will last. Shouldn't we learn from the fate of our processing plants across the border?