Page 17 - Sphere No.29 (Jun 2011)

A shared future:
Hong Kong’s role in the new
Pearl River Delta
For many in booming Hong Kong at the end of the 70s, the Pearl River Delta seemed
remote and insignificant – the rural fringe of a closed, mysterious and struggling
nation. Not so for the city’s manufacturers. These entrepreneurial visionaries quickly
saw the Chinese government’s “opening of the door” to southern China for what it was
– a lifeline.
At the time, Hong Kong was a preeminent manufacturing hub, with close to a
million people employed in manufacturing. But it was running out of both space and
workers for labour intensive industries. With domestic costs soaring, Hong Kong
was rapidly losing ground to competitors elsewhere in Asia. The Mainland’s new
economic openness enabled the city’s manufacturers to establish a new – and far
bigger – industrial hinterland in the Pearl River Delta.
Suddenly, Hong Kong became more competitive. Its manufacturers could offer great-
er production capacity at significantly lower cost. In Hong Kong, itself, they upgraded
capabilities in design, logistics and marketing. The “shop-in-front, factory-in-the back”
model which Hong Kong businesses pioneered with their Pearl River Delta partners be-
came Asia’s new paradigm for supplying ever cheaper products to Western consumers.
Hong Kong’s influence cannot be overstated; from 1993 to 2001, utilised foreign
direct investment in Guangdong Province totalled USD121.2 billion, of which
Hong Kong accounted for more than 68 per cent. By 2002, the number of labourers
employed by Hong Kong factories in the Delta had reached over 10 million – with
only 200,000 left in Hong Kong’s own factories.
To deepen cooperation, in 2003, Hong Kong and the Mainland signed the Closer
Economic Partnership Arrangement, which has since been regularly supplemented.
By 2010, foreign invested enterprises, mostly from Hong Kong, accounted for a
staggering 62.2 per cent of Guangdong’s total exports, according to the Hong Kong
Trade Development Council (HKTDC).
The HKTDC believes that Hong Kong must embrace the opportunities arising from
the Mainland’s new economic direction and determination to expand and modernise
its service sector.
In particular, according to the HKTDC, financial reforms will permit the “new” Pearl
River Delta to leverage expertise from Hong Kong to build a more integrated financial
system. Construction has started on a new financial services zone across the boundary
at nearby Qianhai. Already dubbed the Delta’s “Manhattan”, many see it as providing
a lower-cost support base for expanded financial activities in Hong Kong, helping to
facilitate Hong Kong’s continued development as an international financial centre.
From Beijing to Hong Kong, planners and commentators envisage Hong Kong, with
its wealth of technical, management and marketing know-how, contributing to a revo-
lution in advanced manufacturing and services across the Delta. They anticipate that
the city’s existing strengths in finance, law, shipping, logistics and regional headquar-
ters/professional services, underpinned by its profound international knowledge and
service ethos, will again come to the fore as the region seeks to achieve greater global
preeminence across a wider spectrum of economic activity.
Thirty years after rice paddies gave way to factories, it is an opportunity for mem-
bers of Hong Kong’s enterprising and adaptable business community to reprise their
role as drivers of change and transformation in a new, green Pearl River Delta.
2003 • HIT announces the launch
of CT9, Hong Kong’s new-
est container handling
facility; throughput from
HPH’s operations at
Yantian reaches more
than 5.25 million TEUs.
2004 • HIT surpasses the 80
million TEU milestone.
2006 • HIT handles its 100
millionth TEU.
2007 • HPH and Huizhou Port
Affairs Group Company
sign a joint venture
agreement to operate
Huizhou Port International
Container Terminal.
2008 • HPH enters an agreement
to develop Shenzhen
Yantian East Port Phase I
Container Terminal
Project; trial operations
begin at Phase II of Zhuhai
International Container
Terminals (Gaolan).
2009 • HPH and Huizhou Port
Affairs Group Company
Limited break ground on a
facility that will become
Huizhou Port’s first dedi-
cated container terminal.
2010 • The total TEU throughput
of HPH’s Pearl River Delta
ports reaches nearly 25
million, while throughput
at HPH’s facilities in
Kwai Tsing Port tops
11.04 million, of which
transshipment accounts
for close to 60 per cent.
2011 • HPH’s deep-water con-
tainer port businesses
in Guangdong Province,
Hong Kong and Macau
are spun off in March and
listed in Singapore as
Hutchison Port Holdings
Trust.