Hong Kong still has the edge over Shanghai, but for how long?
As Hong Kong celebrates the 20th anniversary of its return to the mainland, Chief Executive Carrie Lam Cheng Yuet-ngor has embarked on several official trips in her first two months at the helm, including to Shanghai and Hangzhou.
On meeting Han Zheng, the party secretary of Shanghai, she expressed a desire to take the bilateral relationship to new heights.
Shanghai is back on the radar screen because our closest neighbour, Shenzhen, has eclipsed virtually every other Chinese city, including Hong Kong.
Lam’s visit to Shanghai and Hangzhou serves as a reminder that it is not only Shenzhen that could be a potential partner but also the Yangtze Delta. With Shanghai as the epicentre, the region offers immense opportunities for collaboration.
Pundits used to compare Shanghai to Hong Kong before the handover, and even after that they predicted that Hong Kong would eventually be displaced by the most affluent and populous city on the mainland. Concern has been expressed on numerous occasions in the past, and still is today, about the rivalry and the threat posed by Shanghai to Hong Kong’s position.
There are reasons to be concerned. In many ways, Shanghai and Hong Kong appear to be running neck and neck. For example, Shanghai came third, behind Hong Kong (second), in new stock listings last year.
The annual throughput of Shanghai’s container ports has already surpassed Hong Kong’s, which has slipped down the global ranking to only the fifth-busiest port in the world. Also last year, Shanghai’s economy grew by 6.8 per cent to 2.75 trillion yuan (about US$400 billion), outpacing Hong Kong’s 2 per cent growth to around US$319 billion.
Besides, Shanghai has aggressively pursued every opportunity to become a successful knowledge-based economy and innovation centre over the past decade, and many world-leading science and technology multinationals have established R&D centres there.
There have been voices, not only within Hong Kong but also in Shanghai, calling for further cooperation between the two cities over the years, because they see mutual benefits. The Shanghai-Hong Kong Stock Connect is a case in point.
Hong Kong’s relationship with Shanghai runs deep. Hong Kong’s industrialisation took off in the 1950s thanks to industrialists and entrepreneurs from Shanghai. And of course, one of the world’s leading banks, HSBC, can trace its origins to both cities.
Among all the Chinese cities, Hong Kong and Shanghai are arguably the most similar in many ways – they were among the first to be exposed to foreign culture, hosting a large number of international companies and a large population of foreign workers for decades; both can now even boast a Disneyland theme park. Hong Kong’s professionals could seek opportunities in the mainland city.
Besides, Hong Kong’s creative sector could benefit from closer ties with Shanghai. In the 1990s and early 2000s, a lot of advertising, media planning and public relations professionals flocked to Shanghai and successfully built prominent careers there.
Our young creative and innovative talent may follow in their predecessors’ footsteps to seek their fortune in Shanghai because, like Hong Kong, it is an international metropolis that needs talented people.
We do not need to view the relationship with Shanghai as a rivalry, but we cannot afford to be complacent either. Shanghai’s free-trade zone and its efforts to tap into the innovative power of its neighbouring cities, including Hangzhou, definitely give it an edge. But Hong Kong still possesses some unique advantages that may not be easily replicated in Shanghai – the convenience offered by the “one country, two systems” arrangement, the free flow of information, the backing of the Greater Bay Area.
Since the Hong Kong Special Administrative Region was established 20 years ago, only three meetings of the Hong Kong/Shanghai Economic and Trade Cooperation have been held to strengthen ties in trade, commerce and technological cooperation. It is high time that another plenary session was held.
Dr Ken Chu is group chairman and CEO of the Mission Hills Group and a National Committee member of the Chinese People’s Political Consultative Conference