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Hong Kong economy

Hong Kong fails to overtake Shenzhen as China’s most competitive city for fourth consecutive year

Think tank says better support for technology and innovation is needed for Hong Kong to climb rankings

PUBLISHED : Friday, 29 June, 2018, 7:55pm
UPDATED : Friday, 29 June, 2018, 8:47pm

Hong Kong was ranked behind Shenzhen as China’s second most competitive city for the fourth year in a row, as a top national think tank urged the former colony to better support innovation and attract new talent.

Professor Ni Pengfei, director of the Chinese Academy of Social Sciences’ centre for city and competitiveness, on Friday also identified high living costs, social conflicts and the city’s reliance on financial industries as key weaknesses.

“Its economic structure is unbalanced, and problems in its systems caused inadequacies in technological innovation,” the Beijing-based scholar said.

Since the annual ranking was first published by the centre in 2003, Hong Kong was ranked China’s most competitive city for 12 years. But it was overtaken by Shenzhen in 2015, and has fallen behind its mainland neighbour as China’s second most competitive city since then.

The centre’s “overall economic competitiveness” ranking was calculated by gauging nearly 300 Chinese cities’ competitiveness in terms of their economic growth and efficiency in the past year.

According to the latest findings, Hong Kong ranked third in “efficiency competitiveness”, the same position as a year ago. But its ranking in “growth competitiveness” dropped 11 places from 19th in the chart last year to 30th this year.

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“It wasn’t because of Hong Kong, it’s because mainland [cities] grew quicker,” Ni explained, in a reference to cities such as Shanghai, Beijing and Shenzhen.

Ni said if Hong Kong were to reclaim its crown as China’s most competitive city, it must provide long-term support for innovation and technology, step up economic integration with mainland cities, and seek to secure its status as the leading economy of Beijing’s “Greater Bay Area” project, which seeks to transform Hong Kong, Macau and nine neighbouring cities into a financial and innovation powerhouse to rival Silicon Valley.

“The government needs to invest money and build platforms … to create a system in which people are willing to engage in innovation and technology,” he said.

“For the Greater Bay Area … its [development] would depends on the efforts made by each city involved, and market forces will play a decisive role.”

Chinese University’s urban and regional development professor Shen Jianfa, who was also involved in the study, added that it was crucial for Hong Kong to attract new talent.

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“There is a risk that talented people in Hong Kong could move to other cities … Hong Kong needs to be careful to attract and retain talent, as they are key to the city’s development,” Shen said.

Karen Tang Shuk-tak, executive director of the Better Hong Kong Foundation, a Beijing-friendly research body involved in the study, echoed Shen’s views.

“Tech companies can afford to pay more [than universities] to hire researchers … If we are to develop high technology, we need to think more about these issues,” she said.

According to the latest rankings, China’s five most competitive cities, from first place to fifth place, are Shenzhen, Hong Kong, Shanghai, Taipei and Guangzhou respectively.

As separate rankings, the academy also gauges the cities’ competitiveness in terms of their living environment and development sustainability.

Hong Kong ranked first in both rankings, the same positions as a year ago.