Liang Hongfu

How to keep HK as a top financial hub

By Hong Liang (China Daily)
Updated: 2006-09-30 06:17
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How to keep HK as a top financial hub

When Victor Fung speaks, businesspeople in Hong Kong listen.

With a PhD in business administration from Harvard University, Dr Fung is well respected among the Hong Kong business community not only for his well-chronicled success as a banker and entrepreneur but, more importantly, as a progenitor and practitioner of the concept of borderless manufacturing.

Applying this concept, he and his brother William have turned their sleepy family business into one of the largest trading houses in Southeast Asia.

Recognizing Dr Fung's experience and expertise in leveraging the industrial might of the Pearl River Delta (PRD) region, we feel encouraged that he is devoting part of his intellectual prowess to helping Hong Kong find its role in the second phase of the PRD's development as outlined in Guangdong's 11th Five-Year Plan.

As chairman of the government-sponsored Greater Pearl River Delta Business Council, Dr Fung has found an effective platform to address the issue of Hong Kong's continued relevance, which has been of growing concern for the government and business community.

Hong Kong has contributed greatly to the rapid industrialization of the PRD region since the mainland began to pursue economic reform and an open-door policy in 1979 by providing capital and trade services for the development of light industries. The wholesale migration of manufacturing industry to the PRD region has transformed Hong Kong into what Dr Fung and other economists called a "smokeless factory" economy specializing in the high-end rungs of the value-added chain.

But in the past five years or so, Guangdong has shifted its development thrust towards heavy and higher value-added industries, including electronic information, petrochemicals and automotive products, while the services sector has also experienced rapid growth.

Of particular significance to Hong Kong is the province's focus on expediting the development of its services sector in the five years to 2010. In addition, Hong Kong is keenly watching the rapid development of the PRD's western region, which could trigger a major relocation of some industries from the highly developed eastern region.

In the Business Council's fiscal 2006 annual report, its second since inception in 2004, Dr Fung stated that these latest economic developments in the PRD region "are bound to bring about new opportunities to Hong Kong."

Noting the "discussions" in Hong Kong over whether it is being marginalized as a result of the quick advances made by PRD cities, Dr Fung said, "It is imperative for Hong Kong to be alert to all possible changes that are taking place in the whole region and to take thoughtful measures to sustain its competitiveness."

After citing a long list of Hong Kong's economic and social advantages, Dr Fung agreed that ultimately Hong Kong's competitiveness rests very much with its people. That addresses the heart of the issue in a way that is shared by many economists and commentators.

To raise the quality of its workforce, the government has invested heavily, both in terms of capital and human resources, in upgrading the standard of higher education with an emphasis on research. There is also a need to allow a larger pool of talent from the mainland and abroad to freely flow through Hong Kong. Their presence, according to Dr Fung, should help increase Hong Kong's competitiveness, attract more capital and create more jobs.

"By becoming a melting pot for professionals, entrepreneurs, students or visitors, Hong Kong can gain substantially from creativity and innovation that such interactions provide," Dr Fung wrote.

Of course, both Hong Kong's government and private sector must continue to invest in infrastructure facilities to cater specifically to the needs and requirements of the development of the PRD region. For that reason, the building of the bridge that links Hong Kong to Macao and Zhuhai in the western PRD is seen to be of paramount importance.

In the longer-term future, Hong Kong will need to look beyond the PRD region to a much larger hinterland on the mainland to sustain its competitiveness.

Hong Kong can, and should, make itself valuable not just to Guangdong, but also to other provinces such as Hunan, Hainan, Yunan, Guizhou, Jiangxi, Fujian and Sichuan, as well as Guangxi Zhuang Autonomous Region. Together, they make up one-fifth of the mainland's land mass and host one-third its total population, and have a combined gross domestic product of US$879.5 billion.

"Regional co-operation is a long-term mission, and concrete results have to be achieved through continuous efforts to explore new areas for co-operation," Dr Fung said.

In this quest, Hong Kong must continue to preserve its pro-business social and economic system, while strengthening its international status as a financial centre.


(China Daily 09/30/2006 page4)