Qianhai: Starting point for HK to build up a new growth engine

December 24, 2021 06:00
Photo: China Daily

The State Council announced earlier “The Plan for Comprehensive Deepening Reform and Opening Up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone” (Qianhai Plan), which mentions two major priorities, including "building a pilot platform for comprehensive deepening of reform and innovation" and "building a high-level gateway for opening-up". For a long time, Qianhai has been the Pilot Demonstration Zone in the Guangdong-Hong Kong-Macao Greater Bay Area, which is not unknown to Hong Kong people. However, the new "Qianhai Plan" raises a question as to whether the relationships between Shenzhen and Hong Kong, as well as other cities in the Greater Bay Area, would be competitive or complementary in nature.

Indeed, Hong Kong has unique advantages in terms of financial industry and business environment in the Greater Bay Area. Under the premise of "One Country, Two Systems", and with the advantages of the Hong Kong system and the rule of law, we can make full use of the support policies and measures brought by the Qianhai Plan to further boost Hong Kong’s economy in the direction of sustained economic development and industrial upgrading in the Bay Area, as well as harnessing Hong Kong’s strengths to meet the needs of the country.

According to the results of an opinion poll published by Our Hong Kong Foundation earlier, nearly 60% of the respondents indicated that they "agree" or "strongly agree" that Hong Kong’s development in conjunction with the nine cities in the Mainland will promote the diversification of Hong Kong’s economy and provide Hong Kong people with a greater variety of employment opportunities. The respondents were also of the opinion that "high-tech" (20%) and "transportation and logistics" (20%), followed by "financial services" (19%) are industries that have the best development prospects in the nine mainland cities.

The homogeneity of Hong Kong's industries and the lack of diversity in local trades have led to few occupational choices and limited career paths for Hong Kong citizens, especially young people. The survey found that the majority of young people in Hong Kong agree that Hong Kong's existing industries are homogeneous in nature and that the economy is overly dependent on the financial and real estate industries. They also agree that Hong Kong needs to support and develop new pillar industries to introduce diversity into the economic structure.

When it comes to overcoming the limitations of Hong Kong's homogenous economic activities and to achieving successful economic transformation, the respondents often mentioned the development of "innovative technology" and "cultural and creative industries”. Both are innovative industries and potential drivers of new economic growth.

Fifty-five per cent of the respondents in the survey said that they "agree" or "strongly agree" that Hong Kong's coordinated development with the nine cities in the Mainland will enhance Hong Kong's overall innovation and technology capacity and help Hong Kong's various industries to upgrade and transform themselves. Regarding the development of the cultural sector, 66% of the respondents indicated that they “agree” or “strongly agree” that the nine mainland cities could provide Hong Kong cultural and art groups with more choice of performing venues, and that the Greater Bay Area would offer access to new audiences. There would be more room for Hong Kong art groups to develop.

Many respondents were also aware of the innovation and technology advantages of the nine mainland cities, especially Shenzhen. Comparing Shenzhen with Hong Kong, they concluded that Shenzhen’s advantages lie in land supply, proactive government initiatives, the priority and ability to attract talents, the abundance of capital, the existence of large IT companies and a complete value chain from incubators to factories.

To solve the problems of economic development and homogeneous work types, Hong Kong must go beyond the borders, accelerate the development of other emerging industries, establish new pillar industries, and seek opportunities in the Greater Bay Area.The release of the "Qianhai Plan" is precisely a great opportunity for Hong Kong to enter the Mainland market.

The Hong Kong SAR Government can establish a mechanism to maintain constant communication with the Ministries and Commissions of the Central Government, Guangdong Province, as well as the Macao SAR Government, and proactively set up a platform for information coordination to facilitate the search of a new “growth engine” for economic diversification. The government can also make use of the land resources of the Greater Bay Area as the "hinterland" to support economic transformation through the promotion of industrial diversification, achieving synergies via the complementary development with the nine mainland cities.

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Lead of Community Studies at Our Hong Kong Foundation