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HK's Future Lies As External Port for Mainland
Strengthening Hong Kong's status as Chinese mainland's external port and service center is the paradigm shift in positioning its economic development in the coming decade, according to Hang Seng Bank's latest issue of the Hang Seng Economic Monthly available Thursday.
Exports of services have been a major generator of foreign income and contributed positively to the economy. As the integration of Hong Kong's economy with the mainland deepens, services exports would become increasingly important in driving Hong Kong's economy.
The report states that since the opening of the mainland market for foreign trade and investment in 1979, Hong Kong's manufacturing sector has gradually relocated production facilities northwards to take advantage of the lower cost.
After undergoing an extensive economic integration with the mainland economy, particularly with the Pearl River Delta region, Hong Kong's manufacturing sector has expanded enormously in the hinterland, drawing growth in the services sector.
Exports of services have grown steadily at an annual compound rate of 13 percent in the past two decades and first overtook the value of domestic exports in 1994.
This has demonstrated Hong Kong's service sector has played an important role in integration of the mainland into the global economy, the report says.
The report points out that the deepening economic integration between Hong Kong and the mainland has made it increasingly difficult to view Hong Kong as an independent economic entity.
The economic development of Hong Kong has also invariably linked up with that of the mainland in view of the surging cross- boundary economic activities and the power ahead of economic reforms and liberalization in the mainland.
With regard to the ongoing integration process, Hong Kong should strive to remain the mainland's preferred "port," serving as an indispensable link between the mainland and the world.
The term "port" should not be narrowly defined as the traditional transportation hub for the shipment and transshipment of cargoes and goods, but should be defined broadly as the preferred place for conducting various kinds of economic activities including financial, information and marketing activities.
The report concludes that the prosperity of Hong Kong relies on how well it plays the role of a services "port" as the hinterland grows rapidly.
While the challenges are big, revitalizing Hong Kong as an external "port" of Chinese mainland as the integration deepens is the propeller of growth in Hong Kong's service economy, it added.
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