Shenzhen and Guangzhou to Surpass Hong Kong in GDP Growth
Within ten years, the GDP of Guangzhou and Shenzhen will surpass that of Hong Kong. This is according to an analysis from the Bauhinia Foundation Research Center, a Hong Kong policy think tank. The center said that Hong Kong must exert more effort in securing the city’s interest in the fast growing market in Guangdong and maintain its competitiveness in the Pearl River Delta.
A professor from the Baptist University Department of Economics said that the fast growing GDP of Guangzhou and Shenzhen only shows that the people living in this cities are enjoying higher purchasing power and quality of life than in the past. It is of little consequence if the two cities surpass Hong Kong, as its economy complements their growth rather than competes with them.
Guangdong underwent an economic transformation after the 2008 financial crisis, rapidly developing their domestic market, of which today, both domestic and foreign enterprises are trying to capture. Hong Kong must fully grasp the economic development trends, opportunities and challenges that have been brought by the development of their industries in the next five years to complement Guangdong’s progression since they have already commenced their 12th five year plan.
Economic restructuring in Guangdong can be accredited to the global economic recession, the rising costs and higher service demands that have been triggered by more wealth in society. The restructuring affected Hong Kong in a lot of ways, especially when Guangdong started to rely less on Hong Kong as a Channel for foreign direct investment, weakening the SAR’s traditional intermediary role.
Hong Kong GDP growth relies heavily on the financial industry, but in order to continue to grow, the city should start identifying their other strong areas that will help increase their GDP such as health services, testing and certification services. Growth can also be assured by optimizing the Closer Economic Partnership Arrangement (CEPA) and other policy platforms in order to further promote cooperation between Guangdong and Hong Kong.