Tue, Sep 04, 2018 - Page 9 News List

China’s Silicon Valley threatens to swallow up Hong Kong

Beijing’s push to create a US$1 trillion economy is facing resistance

By John Follain  /  Bloomberg

The first bullet trains are expected to start arriving under the rail terminal’s 4,000 glass panels next month.

“This will be the fastest border crossing with China,” said Francis Li (李聖基), operating chief for MTR, which runs the project.

The debate highlights a divide between Hong Kong’s Beijing-backed government and its citizens, who routinely give about 60 percent of their votes to opposition candidates in local legislative elections. Many of the territory’s Cantonese-speaking residents — particularly its youth — see little appeal in education and employment in Mandarin-speaking China and are suspicious of the CCP’s intentions.

“It’s the old communist tactic of using economic policy to impose political control,” said Sonny Lo (盧兆興), a University of Hong Kong political science professor who has authored books on Chinese police practices and the territory’s relationship with Beijing.

Concerns have only intensified since Xi took power in 2012 and began tightening China’s already stringent curbs on dissent. The Hong Kong Government’s refusal to grant democracy concessions after mass protests in 2014, convinced some participants to found pro-independence parties — and authorities to launch unprecedented efforts to ban them.

“The bridge, the rail link — so far the Beijing and Hong Kong governments are focusing on the hardware,” said Alvin Yeung (楊岳橋), a lawmaker and leader of the opposition Civic Party. “But the ‘software’ which makes Hong Kong unique matters more — the free rule of law, the free flow of capital, which are lacking across the border.”

Such concerns seem more abstract while riding the moving sidewalk across the Sham Chun River and watching the fields and swamps of Hong Kong’s northern frontier give way to the skyscrapers of Shenzhen. It was there in 1979 that Deng approved what would be his first special economic zone, reversing the flight of people and money from a chaotic and impoverished China.

Implemented by Xi’s father, then-Guangdong Governor Xi Zhongxun (習仲勳), the zone lifted many limits on cross-border trade and foreign investment. Shenzhen swelled with Hong Kong cash and Chinese workers, growing from a fishing village of about 30,000 people into a high-tech metropolis of 13 million.

Entrepreneurs who have grown accustomed to operating on both sides of the border have said that concerns about Beijing’s political intentions are overblown.

Horace Zheng (鄭昊), 38, vice president at start-up Youibot Robotics, said he wants the Greater Bay Area to “take off” so that he can market his vehicle-inspection robot across the region.

“What should I be concerned about?” said Duncan Turner, 39, the British managing director of HAX, an accelerator for hardware start-ups that is located eight floors above a sprawling electronics market in Shenzhen. “People in Hong Kong need to open up to the Bay Area so that they can host the Asian headquarters for tech companies, with factories in China.”

The shift has put Hong Kong’s traditional role as gateway to the world’s most populous country under pressure. The local economy is equivalent to less than 3 percent of China’s GDP, compared with 18 percent in 1997. Hong Kong’s port is only the world’s sixth-busiest container port, lagging behind Chinese hubs such as Shanghai and Shenzhen.

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