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Li Xueying

The Straits Times

Publication Date : 24-01-2013

The hooking of the Hong Kong economy to the mainland locomotive would likely continue at a faster pace in the next 10 years, Chief Executive Leung Chun Ying said as he pledged to help businessmen seize opportunities up north.

Already, the city's service industries are set to have their privileged access to the market in Guangdong extended to another eight provinces and municipalities in the pan-Pearl River Delta region, from Sichuan to Fujian, Mr Leung told business leaders at a lunch yesterday.

The idea to expand access to the region - which accounts for one-third of China's population and gross domestic product - has "received a favourable response from the central authorities", he said. "We will follow up on it in the months ahead."

Starting in two weeks, he will be meeting top leaders of key cities and provinces, with business leaders joining him where possible. "I stand ready to conduct nei jiao, or internal diplomacy, and to lobby on your behalf," he said.

Outlining his economic philosophy - "pro-growth, proactive, forward-looking, pragmatic, responsive and approachable" - Leung said Hong Kong's growth lies mainly in improving business relations with the mainland.

He said the impending completion of infrastructure linking Hong Kong with the mainland, such as the Hong Kong-Zhuhai-Macau Bridge, will enlarge the city's markets and economic hinterland and even change its social landscape.

"We can stand aside and watch. Or we can try to influence the outcome to our benefit."

Thus, it is important for Hong Kong to consider how it can "move up the value chain and broaden its footprint" as an international financial centre, as well as a hub for trade and transportation.

This is the task of the various newly established committees such as the Economic Development Commission, he said.

These steps notwithstanding, worries about Hong Kong's future and competitiveness were raised by some of the 1,500 business leaders during a short dialogue.

Philip Fan, a member of the Chinese General Chamber of Commerce, said: "There are concerns that Hong Kong in the long run may be marginalised with China's development. What can the business community do to enhance its competitiveness?"

Asking companies to "think and invest long-term", Leung also called for the community "to tell us what you need us to do".

Naming the top item on his wish list, Dominic Jephcott, chief executive of supply-chain company Vendigital, said he would like a game plan from the government on how the local economy - now dominated by property and services - can develop its manufacturing wing.

While factories have moved out of Hong Kong, trading offices that source from southern China remain a significant part of the economy. "If the low-value products leave even the mainland and the consumer electronics makers like Foxconn move to inner China, that side of Hong Kong shuts down too," he noted.

"So the question is how, or even, is Hong Kong intending to strategically move up the value chain in manufacturing and supply-chain management?" he asked, citing as an example Singapore's investments in aerospace and pharmaceuticals.

It is one of the questions the Leung government - which has made livelihood issues its key theme - would have to ponder.

Leung said: "Economic development is of particular importance to Hong Kong because we will be able to properly address our housing, poverty, ageing population and environmental issues only with robust and sustained economic growth."