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Meeting the challenges in Guangdong-HK cooperation
2013-03-15, Ko King-tak

Guangdong-Hong Kong (GD-HK) cooperation is a strategic decision of political and economic significance, and is crucial to ensuring the success of “One Country, Two Systems” as well as Hong Kong’s prosperity and stability. However, some issues have emerged since the two regional governments signed the Framework Agreement on GD-HK Cooperation. The five outstanding issues are: GD-HK cooperation is wantonly politicized by a small number of people in Hong Kong; disputes and conflicts have become more frequent as cross-boundary personnel exchanges expand; GD-HK cooperation remains at the lower end of the supply chain and cannot satisfy the demand of economic development; GD-HK cooperation has been beset by stiff competition between the two neighbors; and the GD-HK government cooperation mechanism is flawed, requiring continued improvement. All these issues call for immediate solutions.

First, more efforts are needed to expose “de-Sinofication” attempts in Hong Kong and speed up GD-HK economic integration. A very small number of individuals in Hong Kong are politicizing GD-HK cooperation to the maximum and trying to hamper and sabotage every supportive policy made by the central government to help Hong Kong and measure and project aimed at facilitating GD-HK cooperation by means of “de-Sinofication”. Although such “de-Sinofication” acts do not represent the majority of Hong Kong society, their destructive efforts should not be overlooked. I suggest the two regional governments join forces with the press to expose these people’s attempts to hijack Hong Kong residents’ wish by blowing isolated disputes between Guangdong and Hong Kong residents out of proportion and creating the false impression that Hongkongers oppose GD-HK cooperation, reject mainland compatriots and even the motherland and the central government.

At the same time, it’s necessary to hasten regional economic integration in the Greater Pearl River Delta Region with Guangdong, Hong Kong and Macao as the mainstay, enhance the economic, social and cultural fusion of Guangdong and Hong Kong, and speed up the construction of a super cosmopolitan cluster centered on Hong Kong, Shenzhen and Guangzhou. We should replace the old thinking of “separating the two systems” and “keeping the two regions apart” with the new concept of “connecting the two systems” and “marrying the two regions” in order to  crush the “de-Sinofication” attempts by those despicable people.

Second, disputes and conflicts between mainlanders and Hongkongers must be resolved as soon as they arise. We have witnessed some disputes between the two neighbors in recent years as cross-boundary personnel exchanges grew, such as an influx of mainland women seeking to give birth in Hong Kong and parallel trading having gone wild. The resolution of such problems requires close cooperation, constant communication and effective coordination.

Like neighbors next door in real life, it’s only normal for Guangdong and Hong Kong to find themselves arguing over petty issues once in a while. The two have been able to maintain development side by side in an inter-complementary and mutually supportive fashion to achieve win-win results for the benefit of both sides. Differences and disputes over livelihood issues are inevitable as the two sides try to push forward their economic integration, but they can be resolved if the two neighbors keep the channels of communication open and remain focused on further cooperation.

Third, GD-HK cooperation should move up the value chain by taking full advantage of Hong Kong’s competitive edge. In recent years, GD-HK cooperation has not been able to keep up with economic development because of technological constraints in the lower end of the supply chain. This is mainly seen in the fact that economic entities involved in GD-HK cooperation are mostly small in scale and lack the ability to climb up the supply chain; and various industrial sectors find themselves wasting precious resources on low-end developments repeatedly due to lack of coordination among them, thus preventing them from meeting the requirements of structural adjustment, changing business models and overall economic development.

Under the new conditions for cooperation, Guangdong and Hong Kong must develop the high-tech industry to enter the high value-added competition of cutting-edge tech products in order to hold an advantageous position in international division of labor and the global market. We should build a combo-style cosmopolitan cluster with Hong Kong in the center and a high-tech industry corridor linking Hong Kong, Shenzhen and Guangzhou surrounded by an industrial eco-sphere that will turn the city cluster into a center for international finance, trade and commerce, logistics, information hub, trade inspection and certification, convention and exhibition, innovative culture, economic law service, high-tech manufacturing, patent registration and tourism/entertainment. Forming an international city cluster centered on a cosmopolitan town like Hong Kong and powered by the combined strengths of Hong Kong and the city cluster in neighboring Guangdong will create a new pattern and open new grounds for GD-HK cooperation.

 

Fourth, GD-HK cooperation should avoid vicious competition. As Guangdong’s economic development surged ahead and its degree of internationalization rose in recent decades, the gap between the two economies has been narrowing while GD-HK cooperation has been experiencing increased competition. For example, Guangdong’s  heavy investment in modernizing major ports in recent years has led to greater competition with Hong Kong in trade and logistics services; while in airport operation and air freight — Hong Kong’s greatest advantage — the HKSAR is now competing against Shenzhen and Guangzhou, the latter has already overtaken Hong Kong in transit freight volume; and a similar situation has emerged in service trade as well.

In view of the situation where GD-HK cooperation and competition proceed side by side, the Framework Agreement on GD-HK Cooperation has provided the two neighboring regions’ development with a clear direction. Guangdong and Hong Kong should follow the heart of the framework agreement faithfully, conduct division of labor reasonably and avoid going solo, repetitive construction and vicious competition. Looking ahead, as the gap between the two  economies narrows, the inter-complementary side of GD-HK economic ties will fade and the traditional pattern of cooperation will be broken, leaving them no choice, but to explore more areas for broader economic cooperation with increasing competition along the way.

Last, the GD-HK cooperation mechanism needs further improvement. By establishing a GD-HK joint conference system, the two sides have shown considerable regard for stronger cooperation especially since they signed the Closer Economic Partnership Arrangement deal. However, the focus of the joint conference mechanism has been fixed on planning and negotiating over specific near-term issues the two regions face and has yet to be elevated to the level of strategic decision-making in regional economic development. This has led to a lack of strategic planning for regional economic development as a whole to guide multi-party cooperation in the Greater Pearl River Delta Region with GD-HK cooperation as the mainstay. The lack of a clearly defined framework for overall cooperation is also slowing down the pace of in-depth cooperation between Guangdong and Hong Kong.

As an official bilateral coordination mechanism for Guangdong and Hong Kong, the joint conference system cannot be counted on to solve problems by meeting only once a year. The annual session format should be replaced with a standing operation mechanism for high-level government officials to meet whenever necessary and broaden the influence of its functions on the GD-HK region so that they can conduct strategic planning for economic development based on the philosophy of advancing with the times, and offer suggestions and services in support of long-term economic development in addition to guidance and oversight for plan execution.

 

The author is a Hong Kong member of the Chinese People’s Political Consultative Conference. 


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