Lawrence Lau, vice chancellor of Hong Kong’s Chinese University (and Kwoh-Ting Li Professor in Economic Development, Emeritus, at Stanford), gives China pretty good marks on its first 10 years resuming sovereignty over Hong Kong.
“I think the Chinese have bent over backwards not to interfere—and whenever they interfere it appears to be at the invitation of people here.” And they don’t take a penny for their trouble, Lau, ’65, says. China draws no revenue from its biggest asset.
But successful as the experiment has been, Lau thinks Hong Kong’s links with Shenzhen, the capitalist-driven boomtown across the border, could be a lot tighter. Its population now approaching 10 million, Shenzhen was a backwater village before being designated the first of China’s five special economic zones 30 years ago. The zones were set up to entice foreigners with cheap labor and tax holidays, and to acquire technology transfer that would power an export industry.
“Shenzhen is going to be a twin city, and there’s no point in competing,” Lau says. “Once you realize that, you try to work together and find win-win solutions.” The economist said as much to China’s Ministry of Commerce in a presentation last December.
Before Hong Kong’s repatriation, officials on both sides of the border taunted as much as talked with each other, the then-mayor of Shenzhen boasting he would be in charge of Hong Kong one day. When it came time to plan Hong Kong’s new airport, the idea of doing something jointly with Shenzhen, also planning a new airport, was dismissed almost out of hand.
The new airports ended up miles apart and in his December presentation, Lau proposes closing the gap with high-speed train links and rethinking airspace. But his proposals go much further. Although border arrangements are loosening now as wealth spreads beyond their perimeters, the special economic zones still have border controls. Traveling through Guangdong province to reach Hong Kong, for instance, involves a border check by Chinese immigration officials first at the perimeter of Shenzhen, and then where people exit Shenzhen and enter Hong Kong—which is no easier for mainlanders to enter than it was before 1997. (With an estimated 300 million mainlanders looking for work, Hong Kong would be overwhelmed, it’s argued, without controls in place.)
Lau proposes removing China’s checkpoint at the Hong Kong-Shenzhen border, and leaving the outer Shenzhen-China border control in place. The idea, in part, is to increase southbound traffic to increase consumption in Hong Kong. Right now, Hongkongers pile into Shenzhen to spend, spend, spend. Lau reckons it’s time Shenzhen folk added Hong Kong to their shopping and entertainment agenda. He suggests issuing smart-card IDs to permanent residents of Shenzhen to automate border crossing, and integrating the cities’ mass transit systems.
Seen from the other side, travelers landing at Hong Kong’s airport would have free access to both Hong Kong and Shenzhen. But on both sides the locals would have the most to gain, with the freedom to work on one side of the border and live on the other. Today, only a few brave the border crush to commute.
“If you look at the long term, it’s slowly sinking in that Hong Kong’s economic future is tied to the mainland,” Lau says. Once people appreciate the reality, they start to think and plan accordingly. The vice chancellor sees an opportunity in education. “Every year, close to 100,000 Chinese students go abroad, most self-financed,” he says. “We have a limited capacity now, but there’s no reason why Hong Kong can’t become a regional educational hub.
That would mean encouraging private education, he says. Tertiary education is public in Hong Kong, so schools are hardly encouraged to spend money on outsiders. “Your main function is to serve the Hong Kong public and there’s a limit,” concedes Lau, who was instrumental in increasing Chinese University scholarships for mainland students. “But a private school can do whatever it wants. My favorite example is Boston and a radius of 100 miles around Boston—90 percent of students are from out of state.”
And what a bounty of schools Massachusetts has. “Only U. Mass is public,” Lau says. There’s a lesson there.
