Among the “weaknesses” is Hong Kong’s quandary as it considers how to transit from a key role in Guangdong’s manufacturing economy to a marginal role in manufacturing and potentially a key role in services and the domestic sector of the provincial economy. Since services are based on the free flow of people and ideas, Hong Kong will need to look at its infrastructure and institutional ties with Guangdong and Macau in a new way. In this context, the “new” Guangdong and Macau present huge areas of opportunity. However, if a sparkling new conurbation is to emerge, it will confront huge strains in terms of the negative externalities of growth, particularly environmental pollution, and must manage them successfully. To the extent that Guangdong’s economic plan is supported by the market and is a success, it will force Hong Kong into a dramatic restructuring of its own. This restructuring must grapple with the reality of economic convergence. Increasingly, Hong Kong and its neighbors in the Pearl River Delta are part of an economic continuum with fewer and fewer institutions that set them apart.
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