Shenzhen passed Hong Kong in an overall economic competitiveness ranking in 2014, according to a report released in Beijing by the Chinese Academy of Social Sciences (CASS), a mainland think tank, Friday.
It was the first time in 13 years that the SAR has lost the crown. Shanghai, Taipei and Guangzhou came third, fourth and fifth in the ranking.
Tianjin, Suzhou, Beijing, Macao and Wuxi ranked from sixth to 10th.
Hong Kong still remained on top in terms of competitiveness of sustainability and Shenzhen ranked the fifth, following Shanghai, Beijing and Macao.
The severe shortage of land and housing supply in Hong Kong has pushed property prices to astronomical levels, while soaring rents have squeezed the profit margins of emerging industries, impeding their development, the report said.
The illegal “Occupy Central” protests, which lasted more than two months last year, and the row over parallel traders between Hong Kong residents and mainland visitors, have eroded the city’s competitiveness to some extent, the academy said.
It is hard to tell from the latest ranking that Hong Kong is losing its competitiveness to Shenzhen, analysts said.
Guo Wanda, executive vice president of China Development Institute, said Shenzhen’s economy is freer than other mainland cities and government efficiency is higher than Hong Kong’s.
“The Hong Kong government has adopted a policy of positive non-interventionism, which limits its role in the economy. The Shenzhen government, by comparison, can play a bigger part with innovative polices that attract investment,” Guo said.
Ni Pengfei, head of the Center for City and Competitiveness at CASS, said the ranking indicates that the innovation-driven development mode has made a major breakthrough in Shenzhen. Shenzhen has the highest economic output per unit area among mainland cities, and the city’s energy and water consumption per 10,000 yuan (US$1,611) of GDP is the lowest on the mainland.