Sunday, August 12, 2007
Hong Kong Aims to Embrace Nearby Shenzhen
By Jonathan Cheng
August 9, 2007, WSJ
HONG KONG -- This city has spent much of its decade under Chinese rule trying to maintain its economic autonomy from the mainland. But Hong Kong is now embracing a different strategy: integration.
Since Hong Kong's neighbor Shenzhen was established as China's first economic zone in 1979 by leader Deng Xiaoping, the former fishing village has exploded into a teeming, prosperous city of nine million, a symbol of China's economic aspirations.
As prosperity in Shenzhen and its neighbors in Southern China begins to rival Hong Kong's, this commerce-driven metropolis is looking for new ways to make the most of that growth.
This month, the Hong Kong government said it will consider a plan that could allow two million registered Shenzhen residents to freely enter Hong Kong. If successful, it could be the most ambitious step yet in merging the adjacent cities into an economic powerhouse. Shenzhen and its neighbors have long craved Hong Kong's financial sophistication and global savvy, while Hong Kong is increasingly eager to tap Shenzhen's integration with the rest of China and reputation as a Silicon Valley-style technological hub.
Closer integration raises tricky issues. Labor groups in Hong Kong are likely to fear anything that would allow low-cost workers from China easier access to local jobs. Cross-border crime could become more of a problem. Some Hong Kong residents fear that Shenzhen's lower property values and wages, though rising fast, could drag down Hong Kong's. And with many residents of the former British colony pressing for greater political autonomy, there is also the strong possibility of a backlash from those who want to remain separate and distinct from the mainland.
But calls are growing for comprehensive integration. This week, the Bauhinia Foundation Research Center, a think tank with close ties to the top levels of Hong Kong government, will publish a report proposing ways of 'building a Hong Kong-Shenzhen metropolis.'
The report compares a metropolitan Hong Kong-Shenzhen to New York, Tokyo and London, and suggests ways to streamline commercial, capital and information flows between the two cities, according to an advance brief. The think tank also calls for an increase in human flow and to allow Shenzhen residents to enjoy Hong Kong's social services. 'The goal is to allow businesses and residents on both sides of the boundary to work and live with the greatest convenience possible,' the brief says.
Last week, Hong Kong announced it will build a railroad linking the city with Shenzhen and the commercial center of Guangzhou, cutting a three-hour journey to about 45 minutes. That link will plug Hong Kong directly into China's nationwide railway network.
That could make life easier for businesspeople like Christopher Hassall, a Procter & Gamble vice president who has been based in the company's Guangzhou headquarters for three years. Mr. Hassall, who makes the train ride to Hong Kong about four times a month for business, says tying the cities closer together would provide a huge boost to the regional economy.
Representatives of Hong Kong's investment-promotion agency often travel with their counterparts from Shenzhen and other cities in the surrounding Pearl River Delta region, selling Hong Kong as part of a larger economic unit that includes Guangzhou and manufacturing hubs Dongguan and Zhuhai.
'The whole region is very important to Hong Kong,' says Mark Michelson, associate director-general for the government agency Invest Hong Kong, which has held 56 joint road shows with the city's neighbors in the past four years. Mr. Michelson says promoting the city alongside its mainland Chinese counterparts has been a boon, because it gives Hong Kong a chance to plug itself as a platform for tapping the Chinese market.
In some ways, this is a relatively new tack. Hong Kong has spent much of the decade since the British handover to Beijing trying to emphasize its protected status as a special administrative region of China with its own legal, political and economic framework. Hong Kong has separate membership in the World Trade Organization and maintains its own border controls, which often make it more difficult for people from the rest of China to obtain visas to travel and work here than for people from other countries.
In recent years, Shenzhen has begun to push for greater integration, most notably in a 2005 policy document that suggested the city play a stronger supporting role to Hong Kong, proposing closer links with the city while building itself up as a domestic hub for southern Chinese manufacturers.
Hong Kong's leader, Donald Tsang, has made it an explicit goal to bump Hong Kong's population to 10 million from about seven million, to give the city more global clout. Enrolling Shenzhen could be a convenient solution, while turning a rival into a close partner to counter the lure of business to the Shanghai-anchored Yangtze River Delta region.
Lawrence Lau, president of Chinese University of Hong Kong and an adviser to the Hong Kong government, has proposed removing checkpoints between Hong Kong and Shenzhen and linking the two cities' airports with a high-speed rail link and coordinated airspace.
'There's no point in competing' with Shenzhen, Mr. Lau says. 'Once you realize that, you try to work together and find win-win solutions.'
August 9, 2007, WSJ
HONG KONG -- This city has spent much of its decade under Chinese rule trying to maintain its economic autonomy from the mainland. But Hong Kong is now embracing a different strategy: integration.
Since Hong Kong's neighbor Shenzhen was established as China's first economic zone in 1979 by leader Deng Xiaoping, the former fishing village has exploded into a teeming, prosperous city of nine million, a symbol of China's economic aspirations.
As prosperity in Shenzhen and its neighbors in Southern China begins to rival Hong Kong's, this commerce-driven metropolis is looking for new ways to make the most of that growth.
This month, the Hong Kong government said it will consider a plan that could allow two million registered Shenzhen residents to freely enter Hong Kong. If successful, it could be the most ambitious step yet in merging the adjacent cities into an economic powerhouse. Shenzhen and its neighbors have long craved Hong Kong's financial sophistication and global savvy, while Hong Kong is increasingly eager to tap Shenzhen's integration with the rest of China and reputation as a Silicon Valley-style technological hub.
Closer integration raises tricky issues. Labor groups in Hong Kong are likely to fear anything that would allow low-cost workers from China easier access to local jobs. Cross-border crime could become more of a problem. Some Hong Kong residents fear that Shenzhen's lower property values and wages, though rising fast, could drag down Hong Kong's. And with many residents of the former British colony pressing for greater political autonomy, there is also the strong possibility of a backlash from those who want to remain separate and distinct from the mainland.
But calls are growing for comprehensive integration. This week, the Bauhinia Foundation Research Center, a think tank with close ties to the top levels of Hong Kong government, will publish a report proposing ways of 'building a Hong Kong-Shenzhen metropolis.'
The report compares a metropolitan Hong Kong-Shenzhen to New York, Tokyo and London, and suggests ways to streamline commercial, capital and information flows between the two cities, according to an advance brief. The think tank also calls for an increase in human flow and to allow Shenzhen residents to enjoy Hong Kong's social services. 'The goal is to allow businesses and residents on both sides of the boundary to work and live with the greatest convenience possible,' the brief says.
Last week, Hong Kong announced it will build a railroad linking the city with Shenzhen and the commercial center of Guangzhou, cutting a three-hour journey to about 45 minutes. That link will plug Hong Kong directly into China's nationwide railway network.
That could make life easier for businesspeople like Christopher Hassall, a Procter & Gamble vice president who has been based in the company's Guangzhou headquarters for three years. Mr. Hassall, who makes the train ride to Hong Kong about four times a month for business, says tying the cities closer together would provide a huge boost to the regional economy.
Representatives of Hong Kong's investment-promotion agency often travel with their counterparts from Shenzhen and other cities in the surrounding Pearl River Delta region, selling Hong Kong as part of a larger economic unit that includes Guangzhou and manufacturing hubs Dongguan and Zhuhai.
'The whole region is very important to Hong Kong,' says Mark Michelson, associate director-general for the government agency Invest Hong Kong, which has held 56 joint road shows with the city's neighbors in the past four years. Mr. Michelson says promoting the city alongside its mainland Chinese counterparts has been a boon, because it gives Hong Kong a chance to plug itself as a platform for tapping the Chinese market.
In some ways, this is a relatively new tack. Hong Kong has spent much of the decade since the British handover to Beijing trying to emphasize its protected status as a special administrative region of China with its own legal, political and economic framework. Hong Kong has separate membership in the World Trade Organization and maintains its own border controls, which often make it more difficult for people from the rest of China to obtain visas to travel and work here than for people from other countries.
In recent years, Shenzhen has begun to push for greater integration, most notably in a 2005 policy document that suggested the city play a stronger supporting role to Hong Kong, proposing closer links with the city while building itself up as a domestic hub for southern Chinese manufacturers.
Hong Kong's leader, Donald Tsang, has made it an explicit goal to bump Hong Kong's population to 10 million from about seven million, to give the city more global clout. Enrolling Shenzhen could be a convenient solution, while turning a rival into a close partner to counter the lure of business to the Shanghai-anchored Yangtze River Delta region.
Lawrence Lau, president of Chinese University of Hong Kong and an adviser to the Hong Kong government, has proposed removing checkpoints between Hong Kong and Shenzhen and linking the two cities' airports with a high-speed rail link and coordinated airspace.
'There's no point in competing' with Shenzhen, Mr. Lau says. 'Once you realize that, you try to work together and find win-win solutions.'
Labels: Hong Kong
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