For decades, many people in Hong Kong have regarded Singapore as our major competitor in the region, and the two cities do share quite a lot in common.
For example, both Hong Kong and Singapore are tiny in size and densely populated, and both are former British colonies that have inherited the British education system.
Both cities are known for their global outlook, use of English in business activities, rule-of-law tradition, as well as the strong work ethic and resourcefulness of their people.
However, in recent years Hong Kong has witnessed the rise of another major competitor, Shanghai, which is set to become China’s new commercial and financial center. A lot of prominent multinational corporations have already moved their Asian headquarters from our city to Shanghai.
The only thing that is hindering Shanghai from surpassing our city is the fact that the renminbi, or the yuan, is not yet a fully convertible currency. Once the yuan achieves free international circulation in the not-too-distant future, Shanghai is definitely going to replace Hong Kong as China’s most important financial center.
In other words, Shanghai’s triumph over Hong Kong depends almost entirely on the progress of Beijing’s timetable in internationalizing the yuan.
Apart from Shanghai, Hong Kong is also facing the aggressive challenge of another mainland city, Shenzhen, which is rapidly turning into China’s innovation and technology hub.
Shenzhen rose from humble beginnings. Back in the late 1970s, the area was so impoverished that tens of thousands of people in Shenzhen fled to Hong Kong in search of a better life.
It wasn’t until 1980, when Shenzhen was designated as China’s first pilot “special economic zone” that experimented in various kinds of economic reforms, that the once poor city began to undergo rapid transformation.
Indeed, Shenzhen has come a long way, and it is said that the city is likely to surpass Hong Kong in terms of economic output by the end of the year.
Which city is likely to be our next major competitor?
This article appeared in the Hong Kong Economic Journal on Feb 24
Translation by Alan Lee with additional reporting
[Chinese version 中文版]
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