Hong Kong will compete with Shenzhen for a role as a leading Chinese financial and innovation center after President Xi Jinping outlined plans for boosting the economic development of the southern manufacturing and technology hub, according to an economist.
In a speech on Wednesday, Xi described Shenzhen as an important growth engine for the Greater Bay Area, and said that the city will cooperate with Hong Kong and Macao in technological innovation.
However, Shenzhen and Hong Kong generally do not complement each other, said Law Ka-chung, an adjunct professor at the Department of Economics and Finance at City University of Hong Kong’s College of Business.
“I can’t see cooperation happening. And if it’s not cooperation, it’s competition,” Law said at the City Forum on Sunday, adding that both cities are focusing on innovative technologies and the financial sector.
Hong Kong’s main advantages are being an international financial center and a bridge between China and the world, but the city is losing its edge due to American sanctions and foreign investors no longer believing in the integrity of “one country, two systems,” Law said.
However, Shenzhen has already earned its innovation chops with companies like Huawei, Tencent and ZTE, said lawmaker Lo Wai-kwok of the Business and Professionals Alliance for Hong Kong.
Speaking at the same forum, Lo argued that mainland China offered plenty of opportunities for Hong Kong entrepreneurs, citing examples of home-grown businesses such as drone manufacturer DJI, SF Express and China’s first digital-only bank WeBank.
Hong Kong’s youngsters should actively seek new markets and resources in the Greater Bay Area instead of limiting themselves to their home city, Lo added.
Separately, a pro-Beijing heavyweight said on a Now TV program that Xi’s speech “slightly diminished” Hong Kong’s position, because Beijing is worried about the city turning into a base for foreign forces to subvert China.
Xi has chosen to elevate Shenzhen as he no longer has faith in Hong Kong to lead regional development in the Greater Bay Area, said Lau Siu-kai, vice-president of the Chinese Association of Hong Kong and Macau Studies.
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