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SCA: Combination of strengths good for HK and Shenzhen

A combination of Hong Kong's status as an international financial centre and Shenzhen's strengths in the areas of technology, talent and comparative cost, will not only raise the competitiveness of both places, but also enhance the region's financial services, the Secretary for Constitutional Affairs, Mr Stephen Lam said today (April 12).

Speaking at a seminar on Shenzhen-Hong Kong financial co-operation, Mr Lam quoted from a survey on the competitiveness of Mainland cities conducted at the end of 2005, that Hong Kong ranked first on overall competitiveness and Shenzhen was the top-ranking city in respect of growth potential.

The average Gross Domestic Product of Shenzhen Municipality has grown 16% annually over the past five years. In the coming five years, Shenzhen is expected to maintain its 13% economic growth rate. It will also develop high-end sectors, such as science and technology and finance.

The mode of co-operation between Hong Kong and Shenzhen should evolve to accord with the economic changes in the two places so that co-operation between the two sides can be further diversified.

"We have to embark on new modes of co-operation, for example, in the area of innovation technology," Mr Lam said. "Under the framework of Hong Kong-Guangdong co-operation, the two sides provided a total of $360 million last year to support the research and development of new technology by scientific research institutes and enterprises in the two places. This has not only contributed to the advancement of the technological standard of enterprises, but also boosted the development of markets for different products in both places."

The Hong Kong Productivity Council and its counterpart in Shenzhen are establishing a joint productivity base to offer a wide range of services to enterprises in Hong Kong and Shenzhen, including development of innovation technology, information, management and training. These services boost the productivity of enterprises in both places.

In respect of financial services, Mr Lam said that in the past few years Hong Kong and Shenzhen had launched Hong Kong dollar and US dollar joint cheque clearing facilities, as well as the Hong Kong dollar and US dollar cross-boundary Real Time Gross Settlement system links. Last year, the average daily volume of transactions in Hong Kong dollars and US dollars under the cross-boundary Real Time Gross Settlement system links was $300 million and US$42 million respectively.

Also, since the commencement of RMB business in Hong Kong in early 2004, the clearing arrangements for RMB business in Hong Kong have been processed via the Shenzhen Branch of the People's Bank of China.

"Hong Kong's financial services sector will continue to provide quality services to Shenzhen enterprises," Mr Lam said. "In future, we expect that Shenzhen will become Hong Kong's business partner and we will work together to promote the development of the financial industry."

Ends/Wednesday, April 12, 2006