Southern China economic zone proposed
Hong Kong, May 31:
Officials from Hong Kong, Macau and nine mainland Chinese provinces are seeking ways to boost economic cooperation, but analysts said today it was too soon to gauge their prospects for success. A proposed southern China economic zone is intended to improve ties between Hong Kong - with its money and expertise - with neighbouring Guangdong province and other inland provinces that have plenty of cheap land and labour.
Leaders from the region meet here tomorrow for a forum, but analysts said they would wait to see the details that emerge before deciding whether the cooperation can spark significant new growth. “It will increase cooperation between the provinces to a certain extent, but it’s too early to say how big of an impact it will be. It depends on future planning and follow-ups,” said George Leung, chief economist for the so-called ‘Greater China’ region at HSBC Holdings.
The forum comes at a time when China has been seeking to boost Hong Kong’s economy to remove attention from local political disputes that intensified last month when Beijing ruled that ordinary voters here cannot choose the successor to unpopular leader Tung Chee-hwa in 2007. Many Hong Kong companies now use neighbouring Guangdong province as a location for their factories, and economist Andy Xie at investment bank Morgan Stanley said it now remains to be seen whether such activity will spread further inland to Jiangxi and Guangxi provinces. “This is the key to make the concept work,” Xie said.
A top Guangdong official visited Hong Kong today, touring the stock market with Tung for a firsthand look at the territory’s capitalist system. “I’m full of confidence for Hong Kong’s future,” said Zhang Dejiang, head of Guangdong province and a member of the Communist Party’s ruling Politburo. The forum will also include leaders from Fujian, Hunan, Hainan, Yunnan, Guizhou and Sichuan provinces.