The Bauhinia Foundation Research Centre shares research reports, occasional papers and weekly analyses on topical matters and current affairs in a timely manner. Want to stay connected with us? Please enter your email address.
Like other parts of the world, Hong Kong has started to feel the damaging impact of the global financial crisis - rising unemployment, economic downturn and a sharp fall in property and stock prices.
Given its global scale, no one can say for sure how long the crisis will last and when Hong Kong will bounce back. The only consensus seems to be the worst is yet to come.
Indeed, the government has acted promptly in rolling out a number of fiscal measures to help relieve the economic pain. But other than fiscal means, which tend to be most effective for the short term, what else can we do to re-engineer Hong Kong's sustained growth in the long run? Can we look beyond our domestic market of more than 7 million people to target a wider market in the Pearl River Delta (PRD), with its population of 51 million and steadily growing purchasing power?
This is what we at the Bauhinia Foundation Research Centre have advocated in our latest study, "Creating a World-class PRD Metropolis". Simply put, the key is to make the pie bigger by pooling our resources with those of the surrounding economies. This, we believe, will benefit all the delta cities, including Guangzhou, Hong Kong and Macau.
We forecast that the development of the PRD metropolis will spur growth in the entire region's gross domestic product, trade and investment in the next three decades. GDP will grow by an extra HK$30 billion and trade volume by HK$54 billion in Hong Kong and Macau alone. In terms of purchasing power parity, the metropolis' per capita GDP will be about HK$780,000 by 2038, which will exceed the average of New York, Tokyo and London.
These figures, although based on economic modelling, suggest that the creation of a PRD metropolis will not be a zero-sum game. This is a rebuttal to the presumption that, if Guangdong develops more, Hong Kong will lose out.
There are also fears that Hong Kong will gradually lose its uniqueness and become just "another city in China". While such opinions caution us against letting go of Hong Kong's characteristics, they should not stop us from better connecting Hong Kong to Guangdong - a step more likely to accentuate, rather than dilute, Hong Kong's cosmopolitanism and multiculturalism.
Has the Eurostar, the high-speed train that crosses beneath the English Channel, taken away the uniqueness of the British, French and Belgians? Better links between Hong Kong and other parts of the delta will bring more tourists, businesses and spice to the lives of Hongkongers.
The concept of the PRD metropolis is recognition of the fact that no single economy can stand alone in today's highly globalised and turbulent economic environment. Enlarging the pie will lead to greater demand for services and goods, better economies of scales, and broader exchanges of people in terms of livelihood and consumption.
The PRD metropolis is more than just a concept or vision. For those who reside and work in the delta, it would mean better connectivity and greater convenience. Imagine having a teleconference with overseas clients in your office in Central, meeting mainland suppliers in Zhuhai after lunch, having an evening out watching Sting or Eric Clapton live in Macau and returning home for a good sleep, all on the same day.
This will happen, sooner or later, in the PRD metropolis which will be seamlessly linked by extensive road and rail networks.
What is needed is the speeding up cross-city infrastructural projects, such as the Hong Kong-Zhuhai-Macau bridge and an integrated regional railway system.
Equally important is the formulation of regional environmental protection blueprints and ecological development plans. For Hong Kong, now is the time to take advantage of the enormous opportunities being presented to us.