Metropolis (International City) Competitiveness Study: Hong Kong Vs Shanghai

Hong Kong-Shanghai Metropolis (International City) Competitiveness Study shows that Hong Kong is still ahead of Shanghai in terms of all composite competitiveness indicators in 2006, and remains an international business hub.  However, the international city competitiveness scores of the two cities are narrowing in the past 6 years.

The study has been conducted annually for six years, by the research team from the Faculty of Business Administration, the Chinese University of Hong Kong and the Hong Kong & Macau Studies Centre, Shanghai Academy of Social Sciences. It comprises of a 32-item survey results of 210 CEOs of multinational corporations based in Hong Kong and Shanghai, and a subject analysis of the survey results.

The research team joined hands with the Better Hong Kong Foundation to hold a briefing session in Hong Kong today (21^st March, 2007) to announce the results of the annual study.

This year’s survey conducted in December 2006 is based on the Pyramid of Metropolis (International City) Competitiveness (PCC, 2002) using a 32-item structural questionnaire. The three major PCC dimensions measured are (A) base for sustainable economic growth (20 items), (B) investment environment (10 items), and (C) image of globalization (2 items). A sample of 210 CEOs of multinational corporations (MNCs) based in Hong Kong and Shanghai were invited to rate the achievements of Hong Kong and Shanghai on the 32 indicators.

The survey findings include:

On International City Competitiveness, the highest average competitiveness score is 5, Hong Kong’s score is 4.08, whereas Shanghai’s is 3.21; the difference is 0.87

Hong Kong’s score is still ahead that of Shanghai, but the difference is narrowing, a consistent behavior observed during the past five years

Hong Kong consistently scored higher in competitiveness over Shanghai in all the three PCC dimensions:

Base for Sustainable Economic Growth: Hong Kong’s score for sustainable economic growth is 4.02 and Shanghai is 3.05, the difference is 0.79.

Investment Environment: Hong Kong’s score is 4.13 and Shanghai is 3.05, the difference is 1.08.

Image of Globalization: Hong Kong’s score is 4.30 and Shanghai is 3.63, the difference is 0.67.

Professor Tuan Chyau pointed out that, “Compared to last year, the investment environment of Hong Kong is still seen as the most significant dimension over Shanghai, but the gap between Hong Kong and Shanghai is narrowing in image of globalization. The difference in the scores of the three dimensions is also decreasing, this is due to the higher scores given to Shanghai by MNCs (especially in investment development), and no increase in the scores given to Hong Kong.”

Professor Linda Ng added that “Both Hong Kong and Shanghai’s average competitiveness scores and scores in all the three dimensions show an increasing trend since 2001. The survey results reflect that under the present situation, Hong Kong with its well established platform for market economy and financial system is still viewed as ahead of Shanghai by MNCs.”

Subject analysis of the annual survey

This year’s subject of analysis is the relationship between Hong Kong, Shanghai and the regional integration of Pearl River Delta & Yangtze River Delta.

The research team has studied two groups of indicators: one to measure the significances of Hong Kong to the Pearl River Delta Region and Shanghai to the Yangtze River Delta Region; the other group is economic figures reflecting the economic growth of the two cities.  Prof. Ng remarked that “Although Hong Kong’s GDP is still much higher than that of Shanghai; the growth rate of Shanghai’s GDP in the past 10 years is much higher than Hong Kong. However, Hong Kong still has a proper platform for market economy and well established financial system, which will help Hong Kong to remain as an international hub.”

Prof. Tuan commented that “The 11-5 plan will definitely help Shanghai move forward and achieve more growth in the service industries. Hong Kong may lose eventually her unique and dominant role which she enjoyed in the region in the past half of a century, but Hong Kong’s economic growth will not be undermined or stagnant since China has the need of multiple metropolis in considering her sheer size; and the natural geographical locations of both cities at South and East China resulting in a natural division of labor between the two cities.”

Ms. Karen Tang, the Executive Director of the Better Hong Kong Foundation says that, “The study is very useful for Hong Kong’s policy makers to consider and formulate Hong Kong’s economic and financial polices. The survey result clearly points out that Hong Kong still excels Shanghai in a large extent in investment environment, the policy makers must endeavour to continue to provide an investment-friendly system to maintain Hong Kong’s competitiveness.”

Ms. Karen Tang further added that, “Metropolises like Hong Kong and Shanghai are facing challenges of globalization. Both cities should capitalize their resourceful and productive hinterland, and act as the gateway to the World for China, to strengthen their bases for sustainable economic growth. The Better Hong Kong Foundation believes that through developing economic ties, the two cities will be able to enhance both their international competitiveness. The Foundation will explore with the research team and other related organizations in Mainland and overseas to promote interaction and more collaboration between the two cities. ”

For enquires please contact: Miss Alice Mak of the Better Hong Kong Foundation: (852) 2865 3529 / (852) 6030 6025