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Challenges of global competition in the coming decades make holistic planning a necessity today. Hong Kong needs a well-researched and well-discussed economic development strategy in order to guide the public and private sectors' various efforts toward rejuvenating and upgrading of the local socio-economic system.

There are two major components of this development strategy.

First, Hong Kong needs to clarify its geographic and economic positioning to maximize its inherent advantages. Hong Kong is part of China, but under the policy of "One Country, Two Systems", Hong Kong is both an insider and outsider. This brings institutional advantages to Hong Kong that may be translated into economic advantages. Hong Kong is also located in the Pearl River Delta region facing the South China Sea, which geographically means that the city is both a gateway for outsiders coming to the country, in particular South China. Meanwhile the city is also a springboard for the mainland entering the nations of East Asia and Southeast Asia (and onwards to Oceania as well as lands bordering the Indian Ocean). As part of the Pearl River Delta region - socially, economically and culturally (although not politically) - Hong Kong is in an enviable strategic position to benefit from the region's world-class socio-economic dynamism: per capita retail sales were 50 percent higher than Shanghai in 2011 and regional GDP and retail sales have already surpassed Taiwan and are catching up with South Korea. The economic integration of Hong Kong with the Pearl River Delta region should not be confined to the one-sided overtly pro-business Closer Economic Partnership Arrangement (CEPA). There should be synergy and cooperation in all aspects of development strategy, going beyond the "same-city" cooperation existing between Guangzhou and Foshan. Europe has provided many examples of innovative institutional and economic arrangements for cross-border economic regions that might inspire the Hong Kong and Guangdong governments. On the other hand, Chief Executive Leung Chun-ying's recent Policy Address mentioned the HKSAR joining the China-ASEAN free trade region. Unfortunately, there was no elaboration on efforts spent or activities already carried out for that purpose in his address, probably because the Leung administration remains at the "talking" stage with nothing concrete to push for. As I have reiterated for years in this column, Hong Kong should spearhead the nation's efforts at free trade agreements (FTA), not wait for the country to offer Hong Kong a free ride on already signed FTAs. Integration into the PRD and FTA leadership alongside the mainland should guide Hong Kong's strategy to define domestic policies and institutional changes.

Second, as "Asia's World City" in the 21st Century, Hong Kong should implement a strategy of sustainability. This means more than just a low-carbon city. A strategy of sustainability must also facilitate a livable and inclusive society that is Chinese, Hong Kong and cosmopolitan, evolving together with the country and the world. What the 18th Party Congress Report emphasized in Beijing in November was an integrated and comprehensive development in economy, society, culture, politics and ecology. That should be our basic development strategy for broad sustainability. The best vision, strategy and program for Hong Kong would be a broad vision of sustainability, aligning Hong Kong with the scientific approach to development that the central government has employed since the mid-2000s, drawing heavily on the experiences and ideas of the European Union in the past decades. That would require the SAR government to go beyond individual social welfare measures on poverty and ageing to contemplate the social model that fits the economy and culture of Hong Kong, bringing a sustainable and inclusive development to the majority of the local population, not just the elites. The implications of the social model are not just welfare initiatives and financial spending on these measures. The implications span all aspects of development - the most obvious examples include labor issues, working hours, compensation negotiation, workplace democracy, and a spatial pattern of development.

Colonial Hong Kong had never planned and developed according to an open and socially agreed strategy. The achievements of the colonial era were mostly accidental: the right mix of borrowed time in a borrowed place for millions of mainland people migrating to Hong Kong. Hong Kong has not been lucky this time, with slow to stagnant growth since 1997 in contrast to the rapid growth of mainland cities. Hong Kong might not be lucky in the future, too. We need to work now for the present and the future. A visionary development strategy should unite and mobilize the people for constructive actions. This is exactly what has been lacking in Hong Kong during the past 15 years. Unfortunately, it was also absent from the first policy address of the Leung administration.

The author is the founder and director of the China Business Center at Hong Kong Polytechnic University.

(HK Edition 02/06/2013 page1)