HK needs to wake up to counter threat from Shanghai: Tycoon

HONG KONG — Mr Li Ka-shing, Asia’s richest man, has said that 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.

Mr Li, 85, Chairman of Hong Kong-based Cheung Kong Holdings and Hutchison Whampoa, said the Shanghai free-trade area “will affect Hong Kong heavily”, Radio Television Hong Kong reported on its website, citing comments Mr Li made at a briefing.

The 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 has not released details of what the area will offer, or how long it may take for the policies to be implemented.

Detailed guidelines will not be announced with the official start of the zone at the end of the month, and will be released later, the China Daily reported, citing Mr Kuai Zhenxian, an economist with the Shanghai Waigaoqiao Free Trade Zone Development Co.

The zone, which may push forward China’s goal of making Shanghai a global financial centre by 2020, will help improve the country’s competitiveness, World Bank President Jim Yong Kim said this month. China’s economy expanded 7.7 per cent last year — the slowest since 1999.

Mr Li also touched on politics, saying that Occupy Central, the movement proposed by some civic groups to pressure the Hong Kong government into accelerating the introduction of full democracy, might damage the economy and the city’s reputation as a financial centre.

Separately, Mr Wang Guangya, Director of the Hong Kong and Macau Affairs Office, said Hong Kong residents should focus on the economy instead of politics, as Singapore leapfrogs the city as a financial centre by many measures, according to a report in The Standard newspaper. Still, Hong Kong will not lose out even as the Chinese government supports cities like Shanghai, Mr Wang said.

An opening ceremony for the 29 sq km Shanghai free-trade area may take place at the end of this month and will be attended by Premier Li Keqiang. The zone is located on the eastern side of the Pudong New Area along the Yangtze River.

Shanghai’s free-trade zone may compete with similar areas in Tianjin, a port city south-east of Beijing, and Guangdong province, which is studying a plan to set up a regional free-trade area with neighbouring Hong Kong and Macau. BLOOMBERG