Organizer
The Better Hong Kong Foundation
Co-organizers
Center for City and Competitiveness, The Chinese Academy of Social Sciences
Hong Kong Institute of Asia-Pacific Studies, The Chinese University of Hong Kong
(18 May 2015, Hong Kong) The Press Conference of 2015 China Urban Competitiveness Report (Hong Kong) is held in Hong Kong on 18 May 2015. It is organized by The Better Hong Kong Foundation and co-organized by Center for City and Competitiveness, The Chinese Academy of Social Sciences and Hong Kong Institute of Asia-Pacific Studies, The Chinese University of Hong Kong. Prof. Pengfei Ni from The Chinese Academy of Social Sciences and Prof. Jianfa Shen from The Chinese University of Hong Kong speak in the press conference on the new research results of the urban competitiveness of Chinese cities especially the urban competitiveness of Hong Kong. “The 2015 China Urban Competitiveness Report” project is led by Prof. Pengfei Ni. The theme of the 2015 Report is “Giant hand: lift the new map of Chinese cities”, indicating that the integration among cities and regions under the new trend of socio-economic development is going to sustain the future of China.
Facing both external and internal challenges, the Chinese economy has been experiencing a “new normal” since 2014, which obvious adjustments in the growth rate, the growth mode, and the driving forces are found. This also triggers transformation in Chinese cities’ comprehensive economic competitiveness and sustainable competitiveness, as well as their spatial pattern. Led by new technological revolution, the “Made-in-China 2025” strategy and “High-speed Railway Era”, will be the two major wheels to drive China’s economic development and influence the general pattern of urban competitiveness of Chinese cities. To achieve sustainable urban development, grasping the chances of economic restructuring, focusing on innovation, industrial upgrade, infrastructure development, and increasing the ratio of urban workforce should be the priority of Chinese cities.
The 2014 China urban competitiveness report continues the previous theoretical framework and policy implications, with new changes in the computational method and index analysis. The report distinguishes clearly three parts of urban competitiveness which are comprehensive economic competitiveness, livable and business-friendly competitiveness, and sustainable competitiveness. In this report, 294 cities are ranked by the Comprehensive Economic Competitiveness Index, while 289 cities are ranked by the Sustainable Competitiveness Indices.
According to the Comprehensive Economic Competitiveness Index in 2014, the top ten cities in are Shenzhen, Hong Kong, Shanghai, Taipei, Guangzhou, Tianjin, Suzhou, Beijing, Macao, and Wuxi. They are all cities located in Pearl River Delta (PRD), Yangtze River Delta (YRD), Bohai Rim, and Hong Kong, Macao and Taiwan area. There is no city from central and western China. The most significant change is that Shenzhen surpassed Hong Kong and becomes the most competitive city. Wuxi replaced Foshan as well. Among the top ten, Tianjin is the most competitive in comprehensive growth index, while Macao is the strongest in comprehensive efficiency index.
According to the Sustainable Competitiveness Index in 2014, the top ten cities are Hong Kong, Shanghai, Beijing, Macao, Shenzhen, Guangzhou, Hangzhou, Suzhou, Nanjing, and Xiamen. Similarly, most cities are from PRD, YRD and Bohai Rim, showing that these three city-regions will be the economic engines of China and the pioneers in economic transformation for a long time. Although Hong Kong was surpassed by Shenzhen in the comprehensive economic competitiveness, the city has a significant advantage in the sustainable competitiveness. On the other hand, although Hangzhou, Suzhou, Nanjing, and Xiamen are not the top ten contenders in the comprehensive economic competitiveness, they are strong and among the top ten in the sustainable competitiveness.
To realize sustainable development, Chinese cities need to respond to the following problems and challenges. They must deal with the regional difference in urban competitiveness and inappropriate spatial and scale distribution of cities. They need to promote entrepreneurship and innovation for the development of knowledge-based and business friendly cities. They must reverse drawbacks due to the traditional urban development by massive urban construction and land revenue-based budget. They also need efficient and effective environmental management.
To achieve sustainable urban development in the time of “new normal”, the report makes the following recommendations. First, to achieve sustainable competitiveness based on an objective understanding on the law of urbanization. Second, to realize a free flow and fair exchange of factors of production between urban and rural areas, and among regions. Third, the construction of high-speed transportation network is a good opportunity to optimize the spatial pattern of cities. Fourth, to nurture a supportive industrial structure based on innovation and low-carbon environment. Fifth, a long-term mechanism should be established for increasing sustainable competitiveness.
Hong Kong is surpassed by Shenzhen in comprehensive economic competitiveness and is ranked second. The sub-index of overall efficiency competitiveness is 0.726, ranked third after Taipei and Macao. High degree of agglomeration, streamlined business regulations, and good professional services are the contributing factors. However, the sub-index of overall incremental competitiveness is only 0.278, ranked 32nd, fell by 14 places from last year. The condition of “managing the city without sufficient innovation” does not change. Hong Kong is still over-dependent on trade, financial sector, shipping, tourism, and professional services, while the attention to small-scale, emerging, and potential industries is not enough. There is no new industry to support and lead Hong Kong’s development in long term.
Comprehensive Competitiveness Index and Ranking of Hong Kong in 2014
Year |
Comprehensive Economic Competitiveness Index |
Ranking |
Overall Incremental Competitiveness Index |
Ranking |
Overall Efficiency Competitiveness Index |
Ranking |
Sustainable Competitiveness Index |
Ranking |
2013 |
1 |
1 |
0.363 |
18 |
0.733 |
3 |
1 |
1 |
2014 |
0.913 |
2 |
0.278 |
32 |
0.726 |
3 |
1 |
1 |
Source: The Chinese Academy of Social Sciences’ City and Competitiveness Database
Hong Kong leads in sustainable competitiveness but the sub-index of knowledge-based city is weakening. Hong Kong is ranked first with the index of 1. Hong Kong is also ranked first in the sub-indices of harmonious city and urban-rural integrated city. Hong Kong tops the eco-city sub-index, benefiting from the achievement of a series of environmental protection and energy policies. The city is ranked second and third in cultural city and info-city sub-indices respectively. Nevertheless, the city is ranked 19th in knowledge-based city sub-index, fell by 14 places from last year. Although it is still in a leading position, and there are increases in R&D expenditure and number of R&D personnel, the Hong Kong government does not provide sufficient support to innovation and science & technology development. Hong Kong is also lack of bold plans and effective incentive system for technological innovation.
Sustainable Competitiveness of Hong Kong – Table of Sub-indices
Sub-indices |
Knowledge- based City |
Harmonious City |
Eco-city |
Cultural City |
Urban-rural Integrated City |
Info-city |
Grade |
★★★★★ |
★★★★★ |
★★★★★ |
★★★★★ |
★★★★★ |
★★★★★ |
Index |
0.554 |
1.000 |
1.000 |
0.977 |
1.000 |
0.978 |
Ranking in 2013 |
4 |
1 |
2 |
1 |
1 |
4 |
Ranking in 2014 |
19 |
1 |
1 |
2 |
1 |
3 |
Source: The Chinese Academy of Social Sciences’ City and Competitiveness Database
Although Hong Kong’s comprehensive economic competitiveness and sustainable competitiveness are in the leading positions, the gap with mainland cities is narrowing. Facing challenges and opportunities ahead, Hong Kong should be prepared and grasp every opportunity in the process of cooperation with mainland China, in order to minimize the risk of marginalization. Hong Kong should play the role of “super-connector” well to facilitate “going-out” and “bringing-in” and to create a win-win situation for Hong Kong and mainland China. The report makes recommendations on the future development of Hong Kong in three aspects. First, Hong Kong must emphasize the role of government, and build social cohesion and consensus in development. The government should maintain the governance approach of “moderate change with stability” and realize those promises in the policy manifesto. The government should also help local enterprises to build up their brands, upgrade, and develop the mainland China markets; and coordinate with the National 13thFive-year-plan to bring Hong Kong’s advantages into play. Second, Hong Kong must expand its cooperation and connection with mainland China, particularly an in-depth cooperation with Guangdong province and Shenzhen municipality. Hong Kong should seize the current opportunity to support the “One Belt, One Road” strategy, support the establishment and operation of Asian Infrastructure Investment Bank, facilitate the development of Guangdong Pilot Free Trade Zone, and foster the implementation of Shenzhen-Hong Kong Stock Connect. The more additional economic reform policies are implemented, the stronger the role of “super-connector” of Hong Kong will be. Third, Hong Kong must promote research and innovation and lead the development of a knowledge-based economy. Besides consolidating the development of four major industries, Hong Kong must continue to promote the six potential industries and bring them into full play in order to strengthen Hong Kong’s sustainable competitiveness. Hong Kong should continue the “going-out” and “bringing-in” policy. Like the China-Singapore Suzhou Industrial Park, Hong Kong can work with the Shenzhen counterparts and establish a Hi-tech Park in Shenzhen. By making good use of Hong Kong’s advantage in R&D and PRD’s strength in manufacturing, and bringing the forces of business, academic, and research sectors together, a win-win result can be achieved.
Concluding the press conference, Ms. Karen Tang, Executive Director of the Better Hong Kong Foundation commented that “Though Hong Kong still tops other cities in the Sustainable Competitiveness Index, it is not easy for Hong Kong, as a mature economy, to maintain its leading position in the Comprehensive Economic Competitiveness index amidst the enormous growing power in the cities in the Mainland. It is a signal for Hong Kong to speed up, to innovate and to reinvent itself with some new driving engines. Hong Kong shall make use of its competitive edges especially its world class services in Finance to ride on and to facilitate China’s new grand plan of “One Belt, One Road”. In the past three years, we have been advocating the Government to map out its long-term development plan for innovation and technology and new emerging industries. However, the establishment of the Innovation and Technology Bureau is delayed. Good opportunities lay ahead of us but we have to seize them. They will not wait for us neither will our competitors”.
For enquiries, please contact Ms Jimmie Chow, Communications Manager of the Foundation at Tel: (852) 2865 3529 / 6030 6025 or email: jimmie_chow@betterhongkong.org.