Mainland offers Hong Kong great opportunities

Updated: 2014-12-11 07:56

By Wang ShengWei(HK Edition)

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Last week, Chief Executive Leung Chun-ying and several senior Hong Kong officials visited Huizhou and Shenzhen to promote closer economic cooperation between Hong Kong and the mainland. Their visits are apparently part of the country's new economic development strategy.

In Huizhou, they attended the 13th Symposium on Hong Kong and the Pearl River Delta Industrial and Commercial Exchanges and Cooperation, where Leung stressed that Hong Kong should bypass the old investment model of building cross-boundary low-tech factories.

Already there have been big changes to our garment industry, with 70 percent of Hong Kong-based designers concentrating on the mainland market. Only the management, finance and sometimes marketing support remain in Hong Kong. The rest of the process takes place on the mainland. This cooperation is worthy of the description "designed in Hong Kong, made on the mainland, and sold to the world." And there's still much room for further development.

In Shenzhen, Leung attended the opening of the Qianhai Shenzhen-Hong Kong Youth Innovation and Entrepreneur Hub. He urged young Hong Kong people to visit or work on the mainland to broaden their world view.

Meanwhile, before the annual Central Economic Work Conference which opened on Tuesday, Beijing was preparing a roadmap for repositioning development on the mainland "from west to east". The central government plans to gradually adjust the current strategy of concentrating development in the western regions so that during the 13th Five-Year Plan (2016-20) the focus will return to the eastern regions. The key is to emphasize the importance of further opening-up and steering improvements of the eastern regions by promoting regional economic integration. Recently, national leaders visited the eastern regions to prepare for this upcoming conference. President Xi Jinping visited Fujian; Premier Li Keqiang went to Zhejiang and Vice-Premier and economist Zhang Gaoli went to Jiangsu. The fact that Leung was visiting Huizhou and Shenzhen at the same time may be more than a coincidence.

China wants to replicate the success of the China (Shanghai) Pilot Free Trade Zone in new mainland free trade zones to promote full economic liberalization. With the aim of meeting the new trade and investment standards required by such free trade agreements (FTAs) as the Trans-Pacific Partnership (TPP), China wants to use the Silk Road Economic Belt and the 21st Century Maritime Silk Road strategies - known as "One Belt and One Road" - to encourage enterprises to "go global". The more developed eastern regions have been earmarked as pacesetters for this endeavor.

The TPP has become the pinnacle of the US rebalance to the Asia-Pacific and, if it comes into being, will be the largest FTA in the world. It will encompass over 40 percent of the world's GDP. Despite the wide-ranging effect on the global population, the TPP is currently being negotiated in total secrecy by 12 countries including Australia, Brunei, Canada, Chile and Japan. However, China, with the world's largest economy, has played no part in the negotiations.

Mainland offers Hong Kong great opportunities

So far China has reacted by accelerating its own trade initiative in Asia, the Regional Comprehensive Economic Partnership (RCEP), aiming to reach an agreement by 2015. But, as Li Keqiang said at the opening ceremony of the 2014 annual conference of the Boao Forum for Asia, "As long as the TPP is conducive to the development of global trade and the fostering of an equitable and open trading environment, China is happy to see its conclusion."

Hong Kong is an important participant in the Eastern Coast Economic Zone. It should benefit from the eastward shift in the mainland's economy. But the "Occupy Central" movement casts a dark shadow over our future. In the short term it has led to the government having no spare capacity to focus on our role in the country's economic planning. In the long term it may affect the confidence of foreign investors concerning our future. It may also give them doubts about the legal environment here since one of our main strengths is our rule of law, freedom and stance against corruption.

According to a recent Asia Competitiveness Institute report, social friction has already hindered our competitiveness. This year's competitiveness rankings place Guangdong first, Jiangsu second, Taiwan third and Hong Kong fifth. If Hong Kong's internal friction continues unabated, Shanghai may replace us as an alternative for financial services. In other words, the negative fallout from "Occupy" could be extremely costly not only in political terms, but also in terms of the economy.

The author is an independent scholar and freelance writer. She is also the founder and President of the China-US Friendship Exchange, Inc.

(HK Edition 12/11/2014 page9)