Hong Kong and the Nansha region of Guangzhou, Guangdong Province, could be perfect partners in cooperation, with complementary advantages.

Guangdong aims to upgrade its industrial base to transform the province into a high-quality service economy. A recent study published by the Guangdong Academy of Social Sciences (GASS) suggests that Nansha's development can offer a new area for cooperation between Guangdong and the HKSAR.

Nansha has an area of about 520 square kilometers - only about half that of Hong Kong. The academy says the region's development should hinge on four aspects - ocean strategy, carbon emission, a knowledge-based economy and global cooperation. Hong Kong indeed has a strong competitive edge in these four areas, and clearly there will be plenty of opportunities for cooperation between the city and Nansha.

Ocean strategy refers to Nansha's specific location. As the gateway to the Pearl River Delta, Nansha has huge potential in developing the logistics industry. Hong Kong can offer the skill and experience required in modern logistics, but the lack of land hinders the development of Hong Kong's own logistics industry. Nansha fits in the gap perfectly as it has adequate land to develop itself into an important base for the industry in southern China.

As for carbon emission, there are a number of similarities between Nansha and Hong Kong. Firstly, Hong Kong enterprises are under growing pressure to upgrade itself into a high-value-added sector as a result of tightened anti-pollution regulations on the mainland. Nansha's strategic position as a low carbon-emission place helps Hong Kong industries. Hence, cooperation between the two places will be mutually beneficial to both sides. One particular industry that can be considered is the creative industry, including multimedia and animation production. Another low-carbon industry that Nansha can develop is ecotourism. Due to its geographical location, where fresh and sea water meets, Nansha has rich wetland resources. Low-carbon industries can also mean high-value ecotourism.

To develop a knowledge-based economy, human resources is the key to its success. Nansha can be a perfect production base, while Hong Kong can do the research and development, and raise capital needed for projects in Nansha.

International cooperation is, of course, to Hong Kong's advantage, with the city's traditional, strong ties in international finance, business operation and the flow of information. One possible direction for international cooperation is the provision of education through the setting up of international schools and offshore campuses of overseas universities. Education is a big international business and Hong Kong's links with the international education community will provide good opportunities for Nansha and Hong Kong.

Some people may fear that further integration with the mainland could diminish Hong Kong's position. This view is too narrow and does not take into account the benefits created by the rapid rise of the mainland economy. If Hong Kong were to further develop, closer ties and economic integration with the mainland are absolutely necessary. Those who do not want to excel or do not have the ability to excel will find it difficult to survive. This is not a problem of integrating with the mainland, but a consequence of increased global competition. Integration with China, on the contrary, will further open the door for Hong Kong's aspiring young entrepreneurs .

The author is dean, School of Business at Hang Seng Management College. The views expressed here are entirely his own.

(HK Edition 08/24/2012 page2)