Hong Kong has woken up to the fact that the Greater Bay Area isn’t a concept designed exclusively for its benefit, after analysts pointed out Shenzhen’s plans for a duty-free shopping zone in its downtown area. The same is happening in Macau, where massive shopping centers are being built in neighboring Hengqin.
Unlike Macau, which appears ready to annex Hengqin, Hong Kong cannot get ahead of this trend. The easy days as an “offshore” shopping destination that fueled its tourism industry since the recovery from the last pandemic (SARS in 2003) are unlikely to return after Covid-19 is brought to an end. Hainan is already providing a snapshot of what happens when onshore duty-free shopping is embraced: it, er, migrates back across the border.
This is good. Hong Kong’s duty-free status is a drug that has long needed to be kicked. It has brought in mostly low-end jobs, enriched landlords more than workers, and taken Hong Kong’s focus away from being “Asia’s World City.” Forces pushing for innovation and globalisation of Hong Kong’s economy might stand a better chance again.
However, in many other respects, it would seem that Hong Kong is moving in the other direction, becoming more of a mainland-like city. Shenzhen’s duty-free plan is just a reminder that it is a competitive market that awaits Hong Kong, with or without a GBA masterplan.