1. Is the Megapolis the answer to the Pearl River Deltas transformation in the 21 stcentury? Presented by Patrick Cheung Councillor Hong Kong Foresight Centre Sponsored by

2. 3. Chinas Economic Drivers 1979 - 2009 Export Processing Foreign Direct Investment

Hong Kong has played a pivotal role in both areas

Pearl River Delta Region is Chinas export processing leader

4. Forces at Work What is PRDs future positioning?

Low value, exportprocessing industries

Intense competition from otherdeveloping countries

Chinas rising labour cost

Chinas new

economy model

Up the manufacturing curve

Domestic and service economy

Greater outward investments

Is Hong Kong still relevant?

World Economy

Still waiting for recovery

Economic centre of gravity shifting eastward

China: $2 Tr foreign exchange reserve

Hong Kong as a Financial Centre

Competition from Shanghai and others

5. Vision for PRD/HK from Beijing

PRD key transport, higher value manufacturing and professional services hub

Pilot region for further reforms: economic, political cultural, cultural, social and innovation

Ever closer integration between Hong Kong and Shenzhen, Virtual Merger

Gateway to the world

Leading the way for Chinas next transformation 6. Hong Kong / Shenzhen The New Megapolis?

One country, two systems

Border people movement

Legal

Financial systems

Currency, etc.

Government approach

Directed, top down vs. democratic limited government

HK / SZ

Combined population = 18 to 20 mn

Richest megapolis in China

Access to nationwide talent and technology base

Differences

Wages

Property prices

Retail prices

Languages

Business practices

Etc.

Challenges 7. Opportunity forPrivate Sector Innovation To the innovator goes the spoils!

New opportunity sets

Business processes

Organization approaches

Communication approaches

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