Shanghai may pip HK, says Li Ka-shing
ASIA'S richest man, Mr Li Ka-shing, said Hong Kong needs to raise its competitiveness if it wants to avoid losing out to Shanghai, where China is setting up a free-trade zone, Radio Television Hong Kong (RTHK) reported.
Mr Li, the 85-year-old chairman of Hong Kong-based Cheung Kong Holdings and Hutchison Whampoa, said the Shanghai free-trade zone "will affect Hong Kong heavily", RTHK reported on its website, citing comments he made at a briefing on Tuesday.
The zone may allow freer yuan convertibility, liberalise interest rates and relax restrictions on foreign investment, which may threaten Hong Kong's status as China's biggest financial centre.
Hong Kong residents should focus on the economy rather than politics, as Singapore leapfrogs the Chinese city as a financial centre by many measures, the Standard newspaper reported yesterday, citing remarks to a business delegation by Mr Wang Guangya, director of the Hong Kong and Macau Affairs Office.
The city should give more support to Chief Executive Leung Chun Ying, he said.
Still, Hong Kong won't lose out even as the Chinese government supports cities including Shanghai, Mr Wang said yesterday, according to Mr Chan Wing-kee, a member of the business delegation.
Mr Kevin Lai, a Hong Kong-based economist at Daiwa Capital Markets, said: "People have talked about Hong Kong facing competition from Shanghai for many years. Hong Kong's advantages won't change too much in the coming five to 10 years because it has unique characteristics, such as good rule of law."
Shanghai's free-trade zone may liberalise 19 industries, from banking to shipping, and allow freer convertibility of the yuan, according to a draft plan seen by Bloomberg News.
The government hasn't released details of what the area will offer or how long it may take for the policies to be implemented.
Detailed guidelines won't be announced with the official start of the zone at the end of the month, and would be released later, China Daily said yesterday, citing economist Kuai Zhenxian of Shanghai Waigaoqiao Free Trade Zone Development Co.
World Bank president Jim Yong Kim said this month that the trade zone, which may push forward China's goal of making Shanghai a global financial centre by 2020, will help improve the country's competitiveness.
China's economy expanded by 7.7 per cent last year, the slowest since 1999.