Between March 28 and April 8, which includes the extended Easter weekend and Ching Ming Festival, a staggering 3.6 million Hong Kong residents went north via land control points, compared to about 860,000 mainland residents who visited Hong Kong.
The economic impact of this reversed travel pattern being felt across the Greater Bay Area. Last year, Shenzhen authorities announced that “social consumption and retail spending” rose by 7.8 per cent while its gross domestic product (GDP) grew by 6 per cent, exceeding Hong Kong’s and other first-tier cities on the mainland.
Given our strong currency, Hong Kong ought to devalue. But sticky wages, caused more by labour shortages than an uptick in prices, make it hard for Hong Kong to deflate. Even though commercial rentals have come down, the city’s high wages and property values make it almost impossible for it to compete on price.
A fundamental problem with Greater Bay Area development is that it is far from being a single market, even though integration is one of the objectives of the 2017 framework agreement.
In the long term, the government must develop a strategy for mainland cities and Hong Kong to complement each other. Officials must work out how to make use of the abundant resources mainland cities have to offer to remedy our shortages.
Instead of spending billions to reclaim a small area of land, why don’t we buy good-quality housing that’s readily available in nearby mainland cities, to provide more options for those who live in the northern districts? Now is a good time to buy on the cheap.
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How Hong Kong’s housing market became among the world’s most unaffordable
How Hong Kong’s housing market became among the world’s most unaffordable
We should also take more vigorous measures to phase out hindrances for mainland professionals to work in Hong Kong, bring in more talent and import more mainland labour.
Only by leveraging the mainland’s resources, and combining our strengths with theirs, can we turn the process of Greater Bay Area integration into a win-win formula. The government ought to remould Hong Kong into a metropolis like London or New York, with some of its population dispersing into nearby suburbs.
The Hong Kong diaspora on the mainland will make Hong Kong more influential while relieving the pressure of the cost of living in this city. The government needs to think outside the box and move fast.
Regina Ip Lau Suk-yee is convenor of the Executive Council, a lawmaker and chairwoman of the New People’s Party
