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Southern economies to boost cooperation
By Ding Qingfen (China Daily)
Updated: 2008-04-14 11:54 Hong Kong's economy kept rising at a level higher than expected for four consecutive years ending in 2007. Its service sector includes finance, transportation and tourism makes up 80 percent of the economy. But its position as the world's third largest financial hub has been threatened in the past three years as the mainland stock market grows and more Chinese companies favor Shanghai and Shenzhen listings over Hong Kong. And the expanding handling capacity of Shanghai's Yangshan port and Shenzhen's Yantian port has also been squeezing profits from Hong Kong's port. This January, the Bank of East Asia lowered down its expectation for the 2008 growth rate of Hong Kong economy to 6 percent, from that of 7.2 percent in 2007. For Hong Kong, which has scarce natural resources and whose economic rise relies heavily on the mainland, still-closer relations with the mainland could be the best way out, many experts believe. In Macao gambling is the pillar industry of the resource-scarce region, which annually generates 30 to 35 percent of revenues from huge casinos. The three other prime industries are manufacturing, financial services and real estate. But due to concerns that the gambling business will soon peak, the local government has been seeking a new industry. "Macao could sustain growth by investing more on the mainland, and it could also help Guangdong export more overseas," Yang Yunzhong, president of University of Macao (UMAC) and director of Macao Research Center with UMAC, was quoted by China Business Journal as saying. Blueprint coming along Discussions on what the cooperative model would look like have been heated in recent months. Chen Guanghan, a professor from the Research Center on Hong Kong, Macao and the Pearl-River Delta Region of Sun Yat-sen University and also a member of the investigation team, says the first step would probably be launching a trial zone. The idea is reasonable as the political systems, economies, cultures and law in the three regions are so different and quick large-scale cooperation would prove difficult. But where to locate the trial zone? Officials from Guangdong government are pushing for Hengqin Island, in the southern part of Zhuhai city in Guangdong and near Hong Kong and Macao. The island got approval from the Guangdong government in 2006 for development and construction guidelines but is still waiting for a nod from the central government. But Yang Ruwan, director of Hong Kong Asia-Pacific Research Institution, suggests putting the trial area in the 1-million-sq-m Hetao area, south of the Shenzhen River, which divides Shenzhen and Hong Kong. Wherever it's located, a special financial district is needed for to trade stocks, securities and futures and promote the flow of funds, says Song Hai, deputy governor of the Guangdong province. One idea has been a bridge connecting Guangdong, Hong Kong and Macau. It was first proposed twenty years ago but suspended until it was revived in early 2006. The three areas have agreed to respectively invest a share of 35, 50 and 15 percent in the project. (For more biz stories, please visit Industries)
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