Shanghai’s economy exceeded the size of Hong Kong’s for the first time in at least three decades after stimulus spending helped China skirt the global crisis and lead the world out of recession.
Shanghai’s GDP grew 8.2 percent to the equivalent of US$218.3 billion last year compared with a 2.7 percent contraction to US$210.7 billion for Hong Kong, data compiled by Bloomberg showed. The preliminary reading on Shanghai was published in January and Hong Kong’s release came last week.
The figures highlight 30 years of free-market policies that have spurred China to become the world’s third-largest economy and its No. 1 exporter. Shanghai’s rise may fan concern in Hong Kong that the Chinese city will regain its position as China’s dominant financial center after surpassing the former British colony as the nation’s biggest port and stock-market operator.
“Hong Kong’s role as the bridge linking China and the West is diminishing due to the further opening up of China,” said Hubert Tse, a partner at law firm Boss & Young in Shanghai, who moved to the city from Hong Kong in 2003.
Bloomberg data giving US dollar comparisons for the cities’ economies back to 1981 showed Hong Kong previously leading Shanghai.
David Cohen, an economist at Action Economics in Singapore, said: “Based on those nominal figures, converted at the prevailing rates, it would appear that the Shanghai economy is slightly larger.”
At the same time, China’s data may have less credibility.
Jian Chang, a Hong Kong-based economist at Barclays Capital Asia Ltd, said there were “always doubts and questions,” because provincial numbers fail to tally with national figures.
Tse, a Hong Kong native, is wagering that Shanghai, the birthplace of HSBC Holdings Plc and American International Group Inc, will regain its prewar role as China’s financial capital.
“Shanghai has a population of around 19 million people, which is almost three times that of Hong Kong, and a fast-growing economy, so it is not surprising” that the Chinese city’s GDP is now larger, Hong Kong Government Economist Helen Chan said in an e-mail on Thursday.
From the late 19th century until the Chinese Communist Party took control of China in 1949, Shanghai was “an international city hooked into the world economy” and Hong Kong was only a “colonial outpost,” said Kerrie MacPherson, a University of Hong Kong professor who specializes in urban history.
Their positions “reversed after 1949 with the anti-capitalist policies of the newly minted” People’s Republic of China, MacPherson said in an e-mail on Thursday.
Hong Kong trounces Shanghai on output per person. The most recent per-capita GDP figures, for 2008, show Hong Kong with US$30,977 and Shanghai at US$10,713.
Hong Kong’s attractions include a UK-based legal system, lower tax rates and the free flow of funds. China hasn’t allowed full convertibility of the yuan, limiting its international use, and Hong Kong itself is serving as a test bed for such transactions.
“It’s very hard for Shanghai or any other cities in China, even in Asia” to replicate the strengths of Hong Kong, Mark Clifford, executive director of the Asia Business Council, said in Hong Kong.
Hong Kong ranked No. 3, compared with Shanghai’s 10th place, in the September Global Financial Centers Index, compiled by consultants Z/Yen Group and based on cities’ attractiveness to financial-services professionals.
“A degree of competition between Hong Kong and other major Chinese cities like Shanghai is bound to exist, and this is natural and indeed healthy,” Chan said. “But there is also plenty of room for cooperation between the two cities.”
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)