As Shenzhen moves forward, Hong Kong risks falling behind

The central authorities’ new policy initiative to help Shenzhen eventually develop itself into a global benchmark city has touched a raw nerve with some people in Hong Kong.

Immediately after the policy guideline was issued on Sunday by the Central Committee of the Communist Party of China and the State Council, speculation arose about “an undeclared intention” behind the policy initiative, with some suggesting that Shenzhen will be made an alternative to “unruly Hong Kong” as the key interface between the mainland and the outside world.

This speculation may prove to be far-fetched. But a rising and more open Shenzhen does have implications for Hong Kong’s competitiveness and relevance in the nation’s future development. After all, competiveness is a relative concept.

It is true that Hong Kong has played a significant role in facilitating national development over the past several decades, serving as the intermediary between the mainland and the rest of the world. This is a role that has been seen as “irreplaceable”.

But after four decades of reform and opening-up, the whole mainland market has basically opened up to external investment, with most — if not all — foreign investors no longer having to access the mainland market through Hong Kong. The SAR is no longer irreplaceable, especially when Shenzhen catches up in terms of openness to the outside world and the rule of law.

With these new policies in place, there is a strong likelihood that Shenzhen will succeed in achieving these qualities. Those who bet against Shenzhen are most likely to lose. China has been reputed as a country capable of working miracles, including lifting several hundreds of millions of people out of poverty in just a few decades — a feat no other country has been able to do.

Indeed, Shenzhen itself is a miracle. It has developed from a simple fishing village into a vibrant international metropolis as well as one of the world’s key internet of things hubs and innovation and technology centers — second only to Silicon Valley — in just a few decades.

Hong Kong could well be the hare who loses in its race with the tortoise in Aesop’s Fables should the city continue to indulge in political wrangling — as it has been doing in recent years. The “irreplaceability” notion has long become invalid. To maintain its competitiveness and relevance in the national strategy for development, and to continue to benefit from the rapid growth of the mainland economy, Hong Kong needs to refocus on economic development.