18 hours ago
- Business
- South China Morning Post
Shenzhen's rise is both a challenge and opportunity for Hong Kong
There is life after trade wars. Shenzhen, whose tech industries are vulnerable to US sanctions, is a case in point. Mainland authorities have outlined reforms to accelerate the development of hi-tech emerging industries in the city, for wider adoption across China. They include a detailed 15-point plan to accelerate the roll-out of digital healthcare solutions in the city, including streamlined approvals for AI-powered medical devices. The reforms would enhance Shenzhen's ability to create business models in industries from artificial intelligence to aviation, by helping enlarge the talent pool, expanding local businesses' access to financing, and fast-tracking adoption of cutting-edge technologies.
To support this strategy, Shenzhen will leverage its pivotal hi-tech position at the core of the Greater Bay Area – a cluster of 11 southern China cities including Hong Kong and Macau that will form an economic powerhouse. The plan envisages Shenzhen will ultimately allow companies from the GBA already listed on the Hong Kong stock exchange to pursue secondary listings on the Shenzhen Stock Exchange. In that regard, Shenzhen is playing a long game. But it does fit a planned strategy of using the GBA as a Petri dish for all kinds of financial innovation and liberalisation.
The bigger story remains moves to liberalise all AI and tech development, not least because of the risk of US tech restrictions. It remains to be seen whether the latest trade talks make any difference. But there is no assurance in the longer term given US President Donald Trump's unpredictable approach to policymaking.
Another focus of development is the low-altitude economy and aviation, the latter having the potential for competitive tension with Hong Kong. However, given that Hong Kong is far ahead in aviation connectivity, there may be room for complementary roles that work to both sides' advantage.
Beijing has made the right move to help Shenzhen build on its hi-tech momentum. The reform plan, revealed in a document jointly released by top organs of the State Council and ruling Communist Party, is not only good for Shenzhen but also creates openings for Hong Kong to work more closely with its neighbour.
It is a challenging opportunity. Hong Kong should also be fully aware that Shenzhen will power ahead and its model is to be learned and applied by the whole nation. If Hong Kong wants to be competitive and relevant, it will have to up its game. Hong Kong has certain advantages, such as its universities and depth of research. But the plan is a reminder that its neighbour will not stand still whatever the obstacles to development. Hong Kong should seize opportunities to collaborate, but remain vigilant to maintain its competitive edge.
