Hong Kong has a reputation for reinventing itself to its advantage, based on its evolution, between the 1960s and 1980s, from an industrial to financial centre. Since its return to China in 1997, another chameleon- like change has kept the economy humming, by being a middle man between the mainland and the rest of the world. But the mainland’s opening up and a changing global economic structure are threatening that position, putting our city at another crossroads in its development. It is time for another discussion on which way we should move.
The dilemma is laid out in a report by several central government agencies. They have determined that Hong Kong’s position as a go- between is in decline, being eroded as mainland cities become more internationalised. Increasingly, the mainland is also looking to regional trade agreements, while there is stiffer competition from other cities. The report adds a warning: that while greater integration with the mainland is inevitable and is a way forward, there will be challenges.
Those have already been experienced with backlashes against pregnant mainland women giving birth in our hospitals, the rising stream of tourists from across the border and mainlanders snapping up property. Chief Executive Leung Chun- ying has responded to the outcry with tough action, but it has not dampened anti- mainland sentiment. Integration is necessary, although it is clear that to avoid further problems, it cannot be rushed. Hong Kong and mainland authorities have to carefully assess measures before implementing them.
Exactly what direction to take needs to be actively discussed. The 2003 pact that put in place the “Mainland and Hong Kong Closer Economic Partnership Arrangement”, or Cepa, has brought a host of benefits, among them trade, tourists and the listing of mainland companies on our stock exchange. Our role as China’s main financial, trade and logistics centre has been made plain by Beijing. But these key industries are facing greater competition, particularly from Shanghai and Singapore.
Uncertainties abound, but there is no question the future lies to the north. Although our city is becoming less important as a bridge between the world and the mainland, such shifts happen gradually. What we have no doubt about, though, is our core competitive strengths – free trade and expression, rule of law, a law- abiding society and an international outlook. These equip us well for our next economic evolution.
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