In a recent commentary, I argued that, in the absence of a radical new growth strategy, Hong Kong is facing an eclipse. In a response, "Hong Kong's strength lies in China's weakness," Jake Van Der Kamp argues that Hong Kong's ageing population is not a major challenge; that the industrial base of the Chinese province of Guangdong is relatively low-tech; and as a result, further integration with it would not enhance Hong Kong's growth prospects.

I beg to disagree on all three counts; big time. In each case, facts are pretty clear. In the past, Hong Kong benefited from China's vulnerabilities. In the future, it must find a way to complement China's strengths.

Graying Hong Kong

Jake's view is that Hong Kong's erosion by ageing population is not that big of a deal and, really, not that different from China. Well, let's look at the facts. A simple comparison of countries by median age will do.

In the list of the grayest populations worldwide, the top positions belong to Monaco, Germany and Japan in which the median age is about 46-51 years. Without elevated immigration, these countries will soon suffer from severe population decline.

With its median age of 45 years, Hong Kong comes right after them, unfortunately. It is graying far faster than other SARs, such as Taiwan (38.7 years, 53rd) or Macau (37.2 years, 62nd), not to speak of China (36.3 years; 65th).

Today even the city's leaders are lamenting about the aging population, the explosion of elderly poverty and youth unemployment. In such circumstances, ignorance is not bliss.

Guangdong myths and realities

According to Jake's view, the [Guangdong] province's industrial base is not built primarily on fancy electronic high-technology but on low-technology plastic moldings and cheap toys." That view of Guangdong is severely flawed.

Contemporary Guangdong has more than 106 million people, which accounts for almost 8% of the total in the mainland. It is China's largest province by GDP and the home of a broad set of multinational and Chinese global corporate giants.