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- Is a merger between Hong Kong and Shenzhen a feasible proposition?
Date: 16-Jan-2007 Sources: (People's Daily)
According to the China Institute of City Competitiveness Report 2006, Hong Kong was overall the most competitive city in the country in economy, society, environment and culture.
Hong Kong notched up the top position five years in a row since the report was first released in 2001.
However, in terms of a 'city's growth competitiveness' which calculates a city's economic growth, Hong Kong came fourth after Shenzhen, Macao and Beijing. The result has triggered concern that Hong Kong, faced with stiff competition, may lose its edge to mainland cities.
So which direction should Hong Kong look to?
Some have suggested merging Hong Kong with Shenzhen to combine the advantages of the two cities and offset their weaknesses.
China Daily spoke to academics to gauge their views.
'We have to define the term 'merger'. A complete merger that requires totally opening up the border would be very difficult to achieve in a short time, as there are discrepancies in quality of life, wages and welfare in the two cities.
An economic merger between the two cities would be more feasible and will provide mutual benefits for Hong Kong and Shenzhen. More economic integration with the mainland is a necessity if Hong Kong is to continue to thrive.
The HKSAR government should take a more active role in enhancing co-operation with Shenzhen, which is vital for Hong Kong's future.
The next 10 years will be a critical period for Hong Kong's development. If Hong Kong does not have more economic co-operation with mainland cities it will get marginalized and outweighed by mainland cities.
For example, Hong Kong Exchanges and Clearing Limited (HKECL) can invest in the Shenzhen Stock Exchange. With its reputation, mature financial system and trading network HKECL can help the Shenzhen Stock Exchange develop into a regional financial center.
The HKSAR government should invest in Shenzhen Baoan International Airport. An example can be drawn from Zhuhai Airport, which is under the management of Hong Kong International Airport.
Besides merging infrastructure, setting up a special area on the border as a special industrial and commerce zone would be feasible.
Shenzhen will provide resources like land and labour. People from Shenzhen will be allowed to work in the zone and travel back to Shenzhen after work.
Hong Kong can provide planning, management and product development. This idea could increase Hong Kong's growth potential.
I suggest adding new elements to Hong Kong's existing economic system.
Depending on the financial sector alone is insufficient to keep Hong Kong competitive. In the long run, Hong Kong should develop industries with high growth potential, for example, gambling and education.
Hong Kong should emulate Singapore in setting up an entertainment centre in the outlying islands, which will supplement the attraction of shopping for visitors.
Hong Kong should also develop itself into an education center for the region.'
Mo Pak-hung, assistant professor, Department of Economics at Hong Kong Baptist University; and an expert on Hong Kong-mainland economic integration
'An economic merger is feasible. Actually there has always been economic co-operation between Hong Kong and Shenzhen in non-governmental circles.
Hong Kong businesses have been using cheap land and labour of Shenzhen to set up factories there, and Shenzhen has become a popular shopping spot for Hong Kong people in recent years.
More economic co-operation will increase the salaries and added value of the Shenzhen workforce.
What is needed is more government initiatives.
To enhance the two cities' co-operation, the HKSAR government can introduce measures to make the flow of people and information more convenient.
For example, the government can simplify clearance procedures, increase more immigration control points and extend opening hours at control points.
But a merger would bring losses to both cities as it would disrupt the current labour distribution. After some Hong Kong companies move to the mainland, low-skilled Hong Kong workers would lose their jobs while high-paid and highly-skilled Shenzhen labour would be replaced by their Hong Kong counterparts.
The biggest obstacle to a merger would be the political considerations of the two governments.'
Fred Kwan Yun-keung, associate professor, Department of Economics and Finance at City University of Hong Kong
'An economic merger, which is possible within five years, could create a new impact on Hong Kong and Shenzhen.
Apart from providing physical space, Shenzhen can provide mobility as it becomes a converging point for mainland talents these would be good for Hong Kong's development.
But a merger could only be possible if the merged region operates in the Hong Kong mode; that is, expanding the advantages of Hong Kong like rule of law to Shenzhen.'
Josephine Kea, vice-principal of Hong Kong Institute of Vocational Education - Sha Tin
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