Concrete Analysis | Time to plan for Hong Kong’s stepped-up integration with Pearl River Delta
As the Pearl River Delta integrates, the city's authorities need to make preparations for a future as part of a mega metropolis
After becoming a special administrative region 17 years ago, Hong Kong is now a key gateway for Chinese capital. Investors and corporate occupiers have been deploying smart money in the city, snapping up commercial real estate and residential assets.
Hong Kong has also become an important fundraising destination for Chinese entities, with more than 700 mainland companies listed on the Hong Kong stock exchange. With new financial market policies such as the proposed Shanghai-Hong Kong Stock Connect scheme, a closer bonding between the financial markets in Hong Kong and the mainland is expected.
The broad agenda for mainland China to gradually open up its financial markets to the rest of the world will see Hong Kong assuming a unique role, one that is not easily replaceable by other financial hubs within the region.
Hong Kong entrepreneurs see the mainland as an unmatched market to grow their business. The top 10 listed Hong Kong property developers in China, combined, have more than 10,000 hectares of land bank on the mainland, seven times the 1,500 hectares they stock in Hong Kong. They also own a combined 3.3 million square metres of Grade A office space in the four first-tier cities on the mainland, accounting for 23 per cent of total stock in these cities.
In addition to fund and money flows, people and trade flows across borders have also become increasingly important for Hong Kong. Last year, the city welcomed 54 million tourists; 40 million, or 75 per cent of them were from the mainland. They spent HK$169 billion on shopping, accounting for 34 per cent of Hong Kong's total retail sales.
Indeed, Hong Kong has been one of the world's best performing retail markets over the past decade. For six of the last 10 years, Hong Kong has registered double-digit retail sales growth.