By Li Hongmei
Shanghai's vice mayor yesterday urged cooperation from Hong Kong over the Chinese mainland's new free trade zone, saying its potential to boost growth will offset any competitive threat to Hong Kong.
The FTZ in Shanghai will allow unfettered exchange of the yuan as part of a bold push to reform the world's second-largest economy.
But the zone has been seen as a threat to Hong Kong's free economy and its status as a finance hub, with fears that capital might flow out to the FTZ.
But Tu Guangshao, executive vice mayor of Shanghai, brushed aside those concerns, saying the FTZ could serve as an engine for collective growth.
"We should make proactive efforts to seize the opportunity. It should provide room for (both) Shanghai and Hong Kong (to grow)," Tu said at the Asian Financial Forum conference in Hong Kong.
"I heard people saying that resources may flow from Hong Kong to Shanghai. There is such possibility. But we should rather see ... there will be a greater market need."
The FTZ opened in Shanghai on September 29, with the government promoting free conversion of the yuan, greater cross-border use of the yuan and interest rate liberalization.
Hong Kong has fallen to No. 3 in the International Institute for Management Development 2013 World Competitiveness Yearbook, compared to its top spot in 2012.
Asia's richest man Li Ka-shing said in September that the new FTZ will have a "big impact" on Hong Kong's economy, urging the city to raise its game to avoid losing out.
But Tu, citing potential areas for mutual cooperation, said Hong Kong and Shanghai could develop new financial products, adding that both cities will be "motivated" to work together under the new mechanisms to be implemented in the FTZ.
"Hong Kong and Shanghai can together fuel growth in Asia and globally," Tu said.
More than 2,400 business leaders and senior government officials from around the world shared their insights on major Asian economic issues at the Asian Financial Forum, which opened yesterday and continues through today.
Themed "Asia: Powering World Growth," this year's forum focuses on Asia's rapidly-expanding role in the global economy.
