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Opinion / Op-Ed Contributors

Guangdong should stand on its own two feet

By Hong Liang (China Daily) Updated: 2014-01-27 07:35

The free trade zone mania has spread from Shanghai to Guangdong province. Late last year, the provincial authorities floated a grand scheme to establish a free trade zone in the prosperous Pearl River Delta region by combining the strength of Guangzhou, Shenzhen and Hong Kong.

As the plan appears to be at its infant stage, there are no details about the exact nature of the combination and it's not clear how the Hong Kong Special Administrative Region fits into a picture conceived almost entirely by officials in Guangdong.

The response from Hong Kong has understandably been lukewarm, at best, as what's in it for the SAR. Hong Kong is already a free trade region and has been one for over 100 years. It's hard to imagine what it can possibly gain from the proposed Guangdong free trade zone.

Of course, economic integration with the mainland in general, and the Pearl River Delta region in particular, has been widely considered to be of great importance to the future development of Hong Kong. Many politicians and business people have repeatedly warned that Hong Kong could be losing its relevance to mainland economic development. However, nobody has come up with any concrete proposals, they simply keep urging the Hong Kong executive to establish new and closer cross-border links.

Before embracing the idea of joining hands with Guangzhou and Shenzhen to form a new economic zone, Hong Kong will have to think hard about how best to balance its interests. Some commentators have noted that the proposed Guangdong free trade zone would be too big a potential competitor for Hong Kong to ignore. Instead of competing with it, Hong Kong should simply try to join it, they argue.

But past experience has shown that potential impact on Hong Kong from the many projects proposed by mainland cities have tended to be exaggerated. Shanghai has been flagging its ambition to become an international financial center that can more than rival Hong Kong for years. But this rise to rivalry remains nothing more than an illusion.

The establishment of the China (Shanghai) Pilot Free Trade Zone did raise some real concerns in Hong Kong at the initial stage when the nature of the project was still unclear. After realizing that it was going to be an experiment based on free-market principles, Hong Kong business people have changed their attitude from one of apprehension to guarded enthusiasm, and begun exploring the opportunities the Shanghai project may provide.

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