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26 May 2003
News Stories:May Headlines

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1. Delta unity means more than roads, bridges

1. Delta unity means more than roads, bridges
CHINA ECONOMIC QUARTERLY, SCMP 26 May 2003

Now that the Sars panic has receded in Hong Kong, it is time to take stock of the disease's long-term impact on the special administrative region. The key issue is that Hong Kong was severely affected by a disease that originated less than 200km away, yet it was unable to gather useful information because of the political gulf separating the Hong Kong and Guangdong governments.

Does this mean Hong Kong suffers from a fatal vulnerability to the caprices of its neighbour? Or does it underscore Hong Kong's continued indispensability as the world's risk manager for China?

Researchers recently polled several Hong Kong worthies on the subject. Two answers came back loud and clear. First, Hong Kong's importance remains undiminished. Second, the government must do a much better job on Pearl River Delta integration, which does not mean more roads and bridges, but a sophisticated upgrade of regional software.

Consultant David Dodwell came up with a nice metaphor for Hong Kong's unique blend of strength and vulnerability. "Hong Kong is not so much a passive gateway, as a placenta which manages mutually beneficial flows," he said.

"Once we see that Hong Kong's intermediary role is complex, rather than a simple gateway or bridge, then the idea that Shanghai is in some way a challenge to Hong Kong can be seen for what it is - preposterous."

Unfortunately, while a placenta can help nourish new life, it can also transmit disease from the mother. This vulnerability explains why Hong Kong must become much more creative in managing its relationship with its immediate neighbours - that is, putting substance into the catchphrase "Pearl River Delta integration". This does not mean wasting time on infrastructure projects like the proposed Hong Kong-Zhuhai-Macau bridge. It means making administrative and political systems catch up with the extensive economic integration that has already occurred over the past two decades.

As Civic Exchange chief executive Christine Loh Kung-wai pointed out, the intricacy of this task stems from the administrative complexity of the region, which includes two special administrative regions, two special economic zones, a provincial government and many local governments. Each player has its own interests and a degree of autonomy.

A second layer of complexity arises from the "one country, two systems" formula, which rightfully makes Hong Kong civil servants suspicious of going down any path that might erode the already precarious self-government.

So far, Hong Kong's leaders have done a poor job of overcoming this natural resistance. Ms Loh notes that for all the talk of new bridges and 24-hour checkpoints, control of cross-border vehicle licensing lies entirely on the mainland. That is a small but telling example of how administrative inefficiency undermines improvements in physical infrastructure.

What is needed is some kind of regional council or forum, where political, business, academic or civic leaders from both Hong Kong and the various mainland jurisdictions can get together, even if only on an informal basis, to figure out what regional integration issues need addressing and how to go about doing just that. The focus of discussions should be what administrative systems need freshening up - or, to use Mr Dodwell's language, improving the placental flows. With tact, Hong Kong could take the lead in creating such a mechanism. It is not as sexy as building bridges, but it is far more useful.

Research by the China Economic Quarterly

 




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