Hong Kong, once known as “the Pearl of the Orient,” has fallen behind its mainland neighbor Shenzhen in terms of economic growth over the past three decades. Despite this reality, there is hope for Hong Kong to catch up.
The Hong Kong government is striving to transform the city into a “headquarters economy” by attracting global businesses. One strategy to achieve this goal is to allow Hong Kong banks to offer banking services in China’s currency, the renminbi, enabling businesses based in Hong Kong to operate more seamlessly on the mainland.
In 1993, Hong Kong’s GDP was 20 times larger than Shenzhen’s. However, by 2022, Shenzhen’s GDP had surged to exceed Hong Kong’s by almost 86 times. This drastic contrast in growth can be attributed to Shenzhen being designated as a special economic zone in 1980, with Deng Xiaoping emphasizing the importance of local autonomy and self-sufficiency in development.
With the right policies and strategies in place, Hong Kong has the potential to close the gap and regain its status as a leading economic hub in southern China.