China using Shenzhen to hedge its bets and reduce reliance on Hong Kong as gateway to West, says long-time global markets adviser
- Beijing last week singled out Shenzhen for reforms to make it a model global city
- But if Beijing uses strong-arm tactics against private companies, it could drive multinationals to Singapore, says expert
China is using Shenzhen to hedge its bets and reduce its reliance on Hong Kong, the gateway to the West that is caught up in political turmoil, according to Water Cheung, Asia-Pacific chief executive for Storm Harbour Securities, a global markets and financial advisory firm.
“If I am Beijing, I would definitely try to hedge this situation, in terms of promoting Shenzhen as another international city,” said Cheung, who has 30 years experience in investment banking. “I think they have no choice [but to reduce reliance on Hong Kong] – this is still the door to the Western world”.
Hong Kong has faced unprecedented unrest against the government and Beijing, for almost three months.
Questions have been raised about whether Hong Kong’s role in the Greater Bay Area – a planned powerhouse to rival the US’ Silicon Valley – will be lessened due to the protests.
Amid the turmoil, Beijing last week announced Shenzhen – north of the border – will become a global model city. Reforms would cover the legal, financial, medical and social sectors, and international organisations would be encouraged to set up there.