Strategic Cooperation between Hong
Kong, Shenzhen and the Pearl River DeltaStrategic Cooperation between Hong
Kong, Shenzhen and the Pearl River Delta
By Philip Bowring
There was a bit of a struggle to get beyond pious expressions that greater cross border cooperation was a "good thing", to specific proposals which were both practical and would be in accordance with Hong Kong's way of doing things which left most initiatives to the private sector. At the dinner it was suggested that one way might be to invite contributions from across the border to future forums making a Penta or even (with the local media also added in) a Sexy forum.
There was a little direct discussion of whether there were in practice trade-offs between specific measures to encourage links with the Delta on the one hand and either China more broadly or the Asian region on the other. Hong Kong was, as the Chief Executive stressed, a Global City. But to what extent was its hinterland the Delta, or the Mainland, or Greater China or East Asia?
An impassioned speech by Emily Lau at the dinner also underscored the need to carry the Hong Kong people with any moves to closer relations which might impact their livelihoods. Workers were worried about jobs given the differential in wage and living costs between the two sides. In this she echoed, from a populist perspective, points made earlier by Prof Lau Pui King, Edwin Lai and Sun Yun-wing that there were significant business interests ranging from property owners and developers to taxi drivers, retailers and monopoly importers from the mainland who were nervous about a more porous border.
Border opening would lower business costs in Hong Kong which would help services there compete with Singapore, Shanghai, Sydney etc. However it would also hurt many people – and government revenues which were heavily dependent on land values. Sung said Hong Kong was schizophrenic. It wanted more trade with the mainland but at the same time to severely restrict right of abode etc. It was also worried about the growth of prostitution, concubinage etc resulting from more open border.
Emily Lau argued that legislators were not obstructing cross border cooperation but the initiative was in the hands of the administration. The government also needed to carry public opinion with it.
John Chan however said that the Two Systems were not necessarily wide apart and that Hong Kong should look at the region's overall interest, not just that of Hong Kong itself.
For some, the Delta was the natural hinterland of Hong Kong and therefore it was natural that barriers to movement of goods and people would come down. Howard Young among others mentioned the need for a single border checkpoint, through train, multifunctional Identification Cards valid on both sides etc. Comparison was made between the US borders with Canada and Mexico. The key goal must be to ensure that regardless of the location of manufacturing Hong Kong remained the commercial hub for the whole of south China. Eden Woon argued that in the New Economy Shenzhen was complementary to Hong Kong more than competitive.
David Dodwell noted that Hong Kong was now only one of several large cities in the Delta, a point which argued for delta's importance. This did not fit easily with the thesis of another speaker that Hong Kong could expand outward and "swallow" the delta, though Dodwell said that rich Hong Kong should be prepared to invest in delta infrastructure.
Michael de Golyer pointedly asked whether a cost benefit analysis had been done on 24-hour border opening and if not why not? No official, or academic, responded to this challenge
Several speakers noted that Hong Kong must move to take advantage of China joining WTO. However it was also observed that this could reduce the advantage of Shenzhen's special position relative to other parts of China. YY Kueh noted that the National People’s Congress was changing laws on local content, import balancing etc to accord with WTO rules, which would mean that Hong Kong needed a new strategy less reliant on traditional export and processing industries. Stanley Ko said that Hong Kong needed to take full advantage of service sector liberalisation following China's WTO accession and brainstorming sessions were needed to make this a win-win situation for Hong Kong.
Others argued that Hong Kong border could not be compared with Canada which was in a free trade pact with the US and Hong Kong was also exempt from some restrictions on western technology exports to the mainland. Hong Kong also had to consider the realities of China itself. There was another border between Shenzhen Special Economic Zone and the rest of the delta. The SEZ came under the central government, not Guangdong. Practical cooperation with the delta was also impeded by rivalries between cities.
Prof Lau argued that at the level of the firm, integration was already well advanced, but government should do more. However, Thomas Chan said that high-tech industries in Shenzhen, Dongguan etc were now going their own way with links to firms elsewhere not Hong Kong. But Hong Kong had to ensure that it could provide services to them, which meant it must keep its own costs down.
Several participants mentioned that there should be more emphasis on One Country rather than Two Systems. Eden Woon said that there was a lack of a sense of urgency for more cooperation now the local economy was recovering. Others said that local civil servants were uncomfortable with their mainland counterparts. Hong Kong should make more effort to understand how the mainland system worked. Meanwhile the numerous mainland offices dealing with Hong Kong made cohesion difficult. For example, problems of two-way permits which would encourage development of service sector business originated more on the mainland than in Hong Kong. Beijing's view of Hong Kong was not necessarily the same as that of officials in Shenzhen or Guangzhou.
Yvonne Choi described the existing level of contacts which included several joint bodies including the Cross Border Infrastructure Committee, the Joint Commission of Commerce and Trade and the Working Group on Environmental Protection. These met regularly and made progress on specific issues – for example Guangdong had listened to views expressed at the Commerce and Trade Commission on rules affecting processing trade.
Also the Hong Kong government was trying to help small and medium enterprises develop mainland business by keeping abreast of regulatory and other developments and passing them on through the TDC, chambers of commerce, etc.
However, Prof Lau and others said that given the way mainland business and government operated the Hong Kong government should do much more, establishing more mainland offices to promoting cooperation with provincial governments. There was also a need to help protect Hong Kong businessmen from arbitrary actions by local authorities.
Prof Chung suggested that officials could benefit from academic research being done on issues such as development of the west and there should be a mechanism to get the benefit of this both to officials and to Hong Kong enterprises.
Anthony Au wanted to see more cooperation between Hong Kong trade associations and their Pearl River Delta counterparts. Hong Kong should present itself as gateway to Shenzhen and its IT industries, not as rival.
Choi said that the cross border committees were trying to look at strategic issues not just immediate problems. Some participants suggested more effort should be made to influence policies, such as on infrastructure development in Guangdong, which affected Hong Kong.
However it was broadly acknowledged that mainland processes were not easy to follow, and were very different from those of the SAR. It was understandable that both sides were cautious and did not want to tread on each other’s toes. It was unclear whether Guangdong itself wanted to liaise more closely and Beijing itself might prefer that Hong Kong deal directly with it, not the provincial government. William Huang said long term planners in Guangdong took order from above so Hong Kong should try to influence the central planners. Anthony Griffiths suggested that exchanges of civil servants would enable each to better understand how their systems worked, and open up channels for mutual influence.
In sum there was much exhortation to "do more" and "understand better", all the while tempered by the political and systemic realities on both sides. On a practical level as far as the Hong Kong government was concerned it boiled down to:
