Just before the Easter holidays, Shenzhen Mayor Xu Zongheng led a sizable delegation to Hong Kong in search of opportunities in financial business. Unlike the past, the visit this time had more far-reaching implications, indicating that cooperation between the Hong Kong SAR and the Shenzhen Special Economic Zone (SEZ) was moving towards a higher level.

In fact, Hong Kong's collaboration with Shenzhen has been the preface to its economic integration with the mainland as a whole. When Deng Xiaoping initiated the idea of setting up an SEZ in Shenzhen, he had in mind its proximity to Hong Kong, whose immense economic power he hoped could help the new city attain rapid growth and become another Hong Kong.

There certainly was a deeper reason behind this strategic decision, namely, to pave the way for Hong Kong's reunification with the motherland in 1997. From then on, Shenzhen and Hong Kong have never looked back. Instead their cooperation has intensified and their scopes broadened.

The manufacturing industry pioneered cross-border cooperation. From 1980 to 1990, Hong Kong's capital constituted 80 per cent of all overseas investments in Shenzhen, which had become the prime destination for Hong Kong factories moving northwards. The influx of Hong Kong capital, the country's preferential policy and Shenzhen residents' pioneering spirit, became the three driving forces behind the SEZ's economic take-off.

Although Shenzhen's economic power is still not comparable to Hong Kong's even after two decades, the SEZ is no longer merely the hinterland of the SAR and backyard supplier of its fancy shops. Its relationship with Hong Kong has been turning subtly into one of mutual dependence and joint venture.

At the seminars held by the financial delegation he led, Mayor Xu announced a series of favourable measures to lure Hong Kong financial institutions into Shenzhen, explicitly stating its willingness to serve as the back-up for the SAR's financial industry. This precisely is what's needed to transform the mode of Shenzhen-Hong Kong cooperation.

This metamorphosis could not have come at a more appropriate time. Hong Kong has been unable to allay fears of being marginalized because of mainland cities' rapid development during the 11th Five-Year Plan period. And those with an insight must have realized that to avoid this from happening, the city must expedite bilateral economic integration, with both sides complementing each other with their unique advantages and pooling their resources. Only by joining hands could the two cities find a way out.

Shenzhen, whose manufacturing industry has begun shifting to peripheral provinces, has set itself the target of developing its service industry. In this respect, learning from Hong Kong is undoubtedly the most convenient shortcut. Should its financial and other services be able to join hands with Hong Kong's, Shenzhen could maintain its lead in the Pearl River Delta (PRD) region, or even in the country, and could establish itself in an invulnerable position.

Viewed from a wider perspective, Hong Kong's cooperation with the mainland should start with collaboration with Shenzhen, and then expand into the PRD region, the entire Guangdong Province and finally to other mainland provinces and municipalities. Therefore, intensifying cooperation with the mainland in various fields often starts with working side by side with the SEZ. The direction of movement is from within to without and from a point to the whole area - a gradual spreading process. The upgrading of Hong Kong-Shenzhen cooperation, hence, is not only an irreversible trend, but also an unavoidable step.

In a competitiveness appraisal among Chinese cities not long ago, Hong Kong retained its number one position, while Shenzhen ranked first in "potential competitiveness". We have reason to believe that these two most vibrant cities will scale new heights in the years to come and deliver another brilliant performance of "A Tale of Two Cities".

Editor: Yan