 |
Shanghai to Overtake Hong Kong in GDP After 15 Years
Shanghai has seen an astonishing growth rate of 12 percent in the last decade. With such figure, Shanghai's gross domestic product (GDP) will surpass that of Hong Kong after 15 years, said top economist of Hong Kong Trade Development Council.
A newly released report by the Hong Kong Trade Development Council acknowledges the growing importance of Shanghai as a trade and finance hub, and says it will become more important than Hong Kong as a centre for China headquarters operations of multinational corporations.
But TDC chief economist Edward Leung stressed that Hong Kong and Shanghai have complimentary strengths and both were likely to serve as regional engines for growth instead of being direct competitors.
"If the economies of Hong Kong and Shanghai both continue to grow at their respective average rates as for the last decade, it will take about 15 years for Shanghai to catch up in terms of the total size of the economy," Leung said in the report.
"It will take about 20 years for Shanghai to catch up in terms of per-capita income," Leung said.
The report said Hong Kong was Shanghai's largest foreign investor and its fourth most important trading partner. Hong Kong's investment has brought management expertise to Shanghai, and provided new opportunities for Hong Kong businesses to expand into the Yangtze River Delta.
The report offers the following breakdown of relative strengths between the two cities in the following areas:
- Knowledge economy: Free flow of information gives Hong Kong a definite advantage. Shanghai's strength lies in a strong industrial knowledge base. - Trading hub: Shanghai dominates the Yangtze River region, while Hong Kong is driving force in the Pearl River Delta.
Shanghai will be a 'regional' trading hub serving other inland provinces/cities in the central and northern mainland, whereas Hong Kong's coverage is much wider spanning the Asia-Pacific.
- Sea Transport: Both have their own cargo catchment areas to serve, but Shanghai's port lags behind Hong Kong's in efficiency. In terms of competition, Hong Kong's main rivals are ports in Shenzhen, while Shanghai faces challenges from Ningbo and other eastern coastal cities.
- Air transport: Shanghai is the air cargo hub for eastern China while Hong Kong dominates the south. Shanghai is working to increase international traffic rights, while Hong Kong is working to integrate with cargo catchment areas in southern China.
- Financial centre: Hong Kong's permier role is as a financial centre serving the Asia-Pacific region, with a secondary role as a conuit for foreign capital inflows to the mainland.
- Multinational headquarters: With expected escalation of foreign investment in China, Shanghai will become more important for multinational corporations' regional operations, especially as their "China headquarters," while their regional business remains in Hong Kong.
- Talent: Hong Kong has many entrepreneurs, professionals, managers and commercial talent in various sectors, while Shanghai has a pool of industrialists, industrial engineers and a relatively well-educated, skilled workforce.
In This Section
|