The Pan-Pearl River Delta (PPRD) concept will bring immense opportunities for Hong Kong, especially in the logistics and finance sectors, two academics said yesterday.

Both warned, however, that it was crucial for the PPRD participants, comprising nine provinces and two Special Administrative Regions (SARs), to complement one another instead of competing with one another.

Baptist University's Department of Economics Assistant Professor Cheng Yuk-shing believed Hong Kong business will be able to tap economic opportunities in China's inland area.

"The idea will widely expand the area of economic hinterland for Hong Kong so local enterprises will no longer limit business development within the Pearl River Delta. The Pearl River Delta region is already limited by space and rising costs after more than a decade of development," Cheng said.

"The PPRD economic development will offer another alternative: local enterprises, which are engaged in light manufacturing industries, can extend their factory bases or divisions established in the Pearl River Delta further into inland regions.

"I believe the PPRD concept will further enhance the economic integration between Hong Kong and the mainland."

Cheng believed Hong Kong will gain benefits in the logistics and finance sectors.

"Hong Kong will play a more important role as a financial hub. Enterprises in the inland provinces are bound to seek listing in Hong Kong to raise capital to finance their business development," he said.

However, Cheng said whether the PPRD free-trade bloc will be formed still depends on the participants' willingness to open their markets to others.

"In China, market access in some inland regions is governed by differing rules," he said. "Even the rules in one province vary - for instance, special economic zones like Shenzhen are much more open to foreign investment and trade," Cheng said.

"So it is important for the PPRD participants to eliminate all those barriers in administrative and policy rules," he added.

The PPRD economic co-operation is based on the assumption that an inland province can provide cheap land, labour and natural resources while Hong Kong and Macao would supply capital, technology and management expertise.

He said it is vital for PPRD participating regions to build on their strengths and maintain such complementary advantages.

"Otherwise, Hong Kong and the mainland provinces will enter into competition and the objective of the PPRD concept may not be achieved," he said.

Meanwhile, University of Hong Kong's Centre of Urban Planning and Environmental Management's chairman Anthony Yeh said the mainland's transport linkage needs to be further improved in fostering PPRD development.

"More high-speed rail networks and super-highways should be built to improve the transportation linkage between Hong Kong. It will help facilitate the flow of capital, cargo and humans," he said.

The PPRD concept, proposed last year by Guangdong provincial Party secretary Zhang Dejiang, is also known as "9+2", referring to nine provinces - Guangdong, Fujian, Jiangxi, Guizhou, Guangxi, Sichuan, Yunnan, Hunan, Hainan - plus Hong Kong and Macao.

The PPRD Regional Co-operation and Development Forum is held in Hong Kong, Macao and Guangzhou, starting today.

(HK Edition 06/01/2004 page2)