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Will Shanghai FTZ be another Hong Kong?

09-29-2013 14:15 BJT Special Report: China Launches Pilot FTZ In Shanghai |

By CCTV correspondent Zhu Dan

While mainland investors cheer the opening of Shanghai's free-trade zone, there are concerns that it'll steal the limelight from Hong Kong as an international center.

The China (Shanghai) Pilot free Trade Zone started operation on Sunday, launching a
test bed for the Chinese leadership's drive of deepening market-oriented reforms and
boosting economic vigor.

This is the current Asian financial center, an international metropolis.

And this is a city trying to become a future financial center.

Hong Kong and Shanghai are always compared, partly due to the interplay between the two cities since the 1940s. But now with the recently announced Shanghai free-trade zone, some believe it will put Hong Kong’s future into the spotlight.

"We’re not looking at Chinese cities as completion, rather we see Chinese cities as customers of HK." Chan Ka-Keung, secretary of HK SAR Financial Services & Treasury said.

Mr. Chan says he is not worried Shanghai’ free-trade zone will threaten Hong Kong. On the contrary, Hong Kong’s transformed itself from a small manufacturing center, to a service center and now an international financial center, partly because China’s opening up and reform.

Trade and logistics have helped Hong Kong’s economy grow by 3-percent through the past quarter.

The sector accounts for nearly 25 percent of Hong Kong’s economic output.

It’s believed that business in Hong Kong is likely to face fierce competition from Shanghai as the harbor becomes fully active, especially after the setting up of the free-trade zone.

Not only this, as the free-trade zone plan may involve amendments to financial regulations, the liberalisation will also be much greater in scale and broader in scope than other similar initiatives in China. Some say the free-trade zone will be another Hong Kong.

So can Hong Kong be copied?

In the latest World Economic Forum’s global competitiveness report, Hong Kong moved up two places to seventh. It ranks top in infrastructure for the fourth consecutive year, and also first in the area of financial market development.

Reporter: “So a more realistic voice here in Hong Kong is that the new free-trade deal for Shanghai would not immediately threaten Hong Kong’s leading position as one of the world’s most important financial centre cities and also one of the busiest ports. But in the long run, Hong Kong must ask itself what competitive strengths are unique to the city; and whether these can be kept for the next decade or two. Even the success of Shanghai doesn’t need to come at the expense of Hong Kong. After all, competition is not a bad thing.”

Editor:James |Source: CCTV.com

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