III. Expediting Economic Integration with the PRD

Direction and Goals

35. Given our geographical location and cultural ties, we have a special relationship with Guangdong Province, particularly the PRD. After some 20 years, the area is now a highly developed and closely knit region. Today, much of the global competition is a contest of integrated strengths among different economic regions. A city is simply not strong enough to compete on its own. To advance its competitive edge, Hong Kong must pool its strengths with other cities in the region. Hong Kong has the advantage of being a world-class international centre of finance, business and logistics. On the other hand, the PRD is the fastest-growing processing base in the world. It will further develop its modern manufacturing and high technology industries. We should make the PRD the economic hinterland supporting development in the rest of the country. In turn, the PRD can use Hong Kong's strengths to elevate its status and competitiveness to become a global player.

New Areas of Co-operation

36. Leaders of the Central Government and Guangdong Province as well as the Chief Executive of Macau fully support the development of the PRD, including Macau, into a major modernised economic region through enhancing co-operation with Hong Kong. The region will be a production and manufacturing base, a centre of modern services such as logistics, professional and financial services, tourism and entertainment, communication as well as consumer and personal services. The leader of the Guangdong Provincial Government and I agreed that we should build on our achievements and venture into new areas of co-operation. In addition to maintaining the tried and tested joint ventures in infrastructure, manufacturing industry and environmental protection, new areas of common interest will be explored. These will include raising and speeding up the level of co-operation to realise our common goal of achieving a major modernised economic region, enhancing our co-ordination in regional infrastructure projects, strengthening our world-class logistics services, developing the western part of the PRD, and fully expanding our services industries. There is scope to explore new areas of co-operation in the financial sector, in improving market regulation and in education. The prospects for economic co-operation with Guangdong are excellent.