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Academics and industrialists have called for closer links between the two governments, and also urged Hong Kong investors to be more proactive in pursing a share of the mainland market.
The plan, announced in March, specified that Hong Kong be developed as a financial, trade and logistics centre.
There have been fears that the SAR could be marginalized if it does not step up its development, because the country is committed to creating a well-off society narrowing the wealth gap between wealthy urbanised Hong Kong and the rest of China.
The SAR government recently held an economic summit to gather opinions from businesses, academics and other professionals on how Hong Kong should react to the national development blueprint.
The summit proposed Hong Kong should be the testing point for full convertibility of the yuan and establish a futures market to strengthen its role as the financial intermediary for the mainland. An action plan will be drafted by the end of the year.
Academics, however, believe that the proposals will be futile, if the SAR government does not communicate frequently with the central government.
"The summit's conclusions reflected the unilateral will of Hong Kong, but without enough emphasis on communication with the central government," said Raymond So, associate dean of Chinese University faculty of business administration.
The SAR government should deepen its communication with the mainland as Hong Kong will be unable to become the testing point for full convertibility of the yuan without co-ordination with the central government, said So.
Despite being reassured that Hong Kong still has a competitive edge in many areas, experts still believe that the city needs to put more effort into catching up with the rest of China's frenetic development pace.
Hong Kong Baptist University (HKBU) economic associate professor Mo Pak-hung said the local community should start preparing for the 12th Five-Year Plan, and discuss with the central government on how the SAR could assist in the nation's growth.
Mo said different cities would draw up their own development plans, which would lead to competition between cities.
"Therefore, Hong Kong should discuss and draw up with the central government a development plan that will benefit both the nation and the city. This will enable the central government to have a better understanding of what Hong Kong needs.
"High-level co-ordination is of paramount importance to avoid cities negatively competing against each other," he said.
Hong Kong businessmen should also not just adopt a "wait and watch" attitude for business opportunities, said local entrepreneur Eddie Lam, chief executive officer of Salland Enterprises, which owns shoes factories on mainland.
Lam started his factories in the Pearl River Delta (PRD) in the 1980s. Capitalizing on the nation's growing consumption market and to combat rising operation costs in the PRD, he started establishing more factories in the Yangtze River Delta Region and other provinces, such as Sichuan, in the 1990s. He now lives in Shanghai with his family.
The mainland accounts for some 30 per cent of Lam's sales, and he plans to increase the mainland's share to 50 per cent this year.
He said parents living in northern parts of China buy eight pairs of shoes for their children each year, while those in the south buy six pairs. Some parents even spend as much as 800 yuan on a pair of shoes.
Lam believes the nation's development plan, which stresses the importance of domestic consumption, will increase demand for his products.
"People are earning more money and they are willing to spend. Why should we rely on overseas imports to fulfill their needs, why don't we produce for them?" he said.
Expanding factory networks was necessary to save logistics costs and establish business with the countries bordering China, he added. Lam said Hong Kong businessmen were not proactive enough, and even lagged behind those from Taiwan Province and overseas, in developing the mainland market.
Some businessmen are reluctant to look for further opportunities, especially when they are making good business from their current practices.
"Some of them have established factories in the PRD region, but they have failed to realize the region will go through the same sort of development Hong Kong did years ago, and that operation costs will rise because of the rapid development. Some others just happy serving the overseas market," he said.
Lam urged Hong Kong businessmen to be open-minded and to capitalize mainland growth.
"Some of them may give up because of the difficulties and differences between Hong Kong and the mainland," he said. "But they should learn how to operate under different systems. It is worth doing that for a share in the mainland market."
HKBU's Mo agreed that Hong Kong had not been proactive enough in pursuing mainland development opportunities in the past, but he said the city was developing as a competitive international financial centre.
Mo said Hong Kong could focus on financial consultancy services to countries with friendly ties with China, such as Southeast Asian and African countries, and offer financial consultancy services, serving as a springboard between the nation and other countries.
"The markets of these developing countries are booming. Hong Kong could introduce the financial products of these countries to investors from both overseas and the mainland, expanding the SAR's services to a wider scope and giving Hong Kong people more investment opportunities," Mo said.
For setting up a futures market, HKBU finance associate professor Billy Mak said Hong Kong should develop metal derivative products rather than energy and agriculture since the city already has a well-developed jewellery industry. He said the futures market should be located close to the places where underlying products are traded.
He added, however, that the city should primarily consider the feasibility of settlement.
"If a mainland farmer utilizes the Hong Kong futures market to hedge the trading risk for his products, the underlying products have to be delivered to Hong Kong for settlement, which would involve many complicated issues such as customs and quarantine," he said.
Mo also said Hong Kong must be developed into an education hub. He believed mainland students would be interested in studying in Hong Kong to learn more about the western world, and vice versa for overseas students.
He urged the SAR government to raise the quota for non-local students at universities, which currently has a maximum of 8 per cent of total students population, to help Hong Kong attract talent.
(China Daily 10/12/2006 page11)