Can Shenzhen Become The New Doorway To The West?
The South China Morning Post reported that Shenzhen is keen on embracing Hong Kong in financial integration plans, pushing for a scheme that will enhance cross-border trade and capital flows between the two cities. The policy would allow Shenzhen greater market access to Hong Kong and its wealthy inhabitants.
Having access to a large pool of affluent consumers could further position Shenzhen as a future luxury hotspot. The Chinese city is already seen as a sophisticated luxury destination for Mainland consumers, but the “Silicon Valley of China” had been overshadowed by the international cities Hong Kong, Beijing, and Shanghai until recently.
Bearing in mind the unusual circumstances of COVID-19 and its related challenges and opportunities, analysts wonder if Shenzhen is set to replace neighboring Hong Kong as the new Asian financial and luxury center.
Now, let’s consider if this is achievable in the foreseeable future.
Shenzhen — the newcomer struggles to build an international reputation
The central government’s plan to make Shenzhen “a global benchmark city” has been widely publicized, but some challenges lay ahead. First, investors see the city as a newcomer, and, thus far, there’s a lack of international reputation and recognition.
Shenzhen did a good job of carving a niche out for itself as a Western-friendly technology hub. But despite past efforts, Shenzhen couldn’t overcome Hong Kong and become the ultimate liaison between Mainland China and the outside world.
Judicial independence, transparency, and capitalism attract foreign investment
Foreign investors depend on the independence of the “one country, two systems” freedom that Hong Kong offers as well as an openness that cannot be found in other cities under the “political patronage” of China.
Having independent judicial power and a capitalist system helped the metropolis prosper and grow into a thriving financial center. But despite Shenzhen’s helpful geographical location, the city cannot provide a similar scenario.