HK urged to boost links with Guangdong for world-class economy

December 01, 2014 18:38
HSBC's Peter Wong (left) says the engine of economic growth will be trade while capital will be the lubricating oil. Photo: HKEJ

Hong Kong should join hands with Guangdong province in China to create a world-class economy through the transformation of the manufacturing sector and the consolidation of the service sector, a senior executive of the banking giant HSBC Holding Plc (00005.HK) said.

"Hong Kong will be responsible for creating financial products and providing financial services for the development of and investment in Guangdong province, and as they work together, they can build a world-class economy in the southern part of China," Peter Wong, HSBC chief executive for Asia Pacific, told the Economic Summit co-organized by the Hong Kong Economic Journal on Monday.

"The engine of economic growth will be trade while capital would be the lubricating oil to get the engine working," he said.

Besides trade, urbanization and the rise of middle class will spur the country's economy.

Guangdong is the world's 16th largest economy, and if Hong Kong's gross domestic product (GDP) is added, it can even rank 15th. Wong expects Shanghai will become a major financial center in Asia after the renminbi becomes freely convertible.

Speaking in the conference, Norman Chan, chief executive of the Hong Kong Monetary Authority, also believes that Hong Kong can act as a hub of Chinese exports as long as the city upholds its competitiveness.

"Hong Kong will not be marginalized even if China opens up and gets a closer relationship with other countries in the region. For example, the number of flights traveling between Hong Kong and Taiwan did not fall even after mail, transport and trade were opened between the mainland and Taiwan," he said.

Chan added that the rising contribution of trading agents and logistics to Hong Kong's GDP shows that the territory is still an important re-export hub for the mainland.

Trading agents and logistics took up 25 percent of the local GDP last year, compared with 20 percent in 1990 and 15 percent in 1979, Chan added.

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Ayishah Ma is a financial reporter on Greater China issues.