Since assuming office, the incumbent administration of the Hong Kong Special Administrative Region has put great efforts into promoting socioeconomic development, aside from enhancing the legal framework for national security. This includes attracting strategic enterprises and talent.

The HKSAR government has set clear goals and formulated strategies for economic development, which are in line with President Xi Jinping’s directives, emphasizing high-quality development with a clear focus on enhancing its status as an international financial center and creating an international innovation and technology hub.

Hong Kong can take a leaf out of Shenzhen’s book in promoting high-quality development.

When Tim Cook, CEO of Apple Inc, met with Commerce Minister Wang Wentao on March 23 in Beijing, Cook indicated that China is an important market with a rich talent pool and innovation vitality, and a crucial supply chain partner for Apple. He reaffirmed Apple’s commitment to long-term development in China and plans to increase investment in China’s supply chains, research and development, and marketing.

Prior to his trip to Beijing, Cook presided over the grand opening of the new Apple Store in the Jing’an district of Shanghai. The store stands as the company’s largest retail outlet in in Asia. With a total investment exceeding 83.4 million yuan ($11.53 million), the store’s stature is second only to Apple’s global flagship on 5th Avenue in New York.

Given Hong Kong’s relatively small area and high labor and land costs, the optimal strategy is to collaborate with other cities in the Guangdong-Hong Kong-Macao Greater Bay Area, particularly with the neighboring city of Shenzhen, to develop an international I&T hub that integrates research and production

On March 20, Apple hosted a showcase at its Shanghai headquarters to display the latest achievements from three of its suppliers — BYD, Lens Technology, and Everwin Precision — in the realms of smart manufacturing, green production, and talent development. Cook met with Wang Chuanfu, chairman of BYD; Zhou Qunfei, chairwoman of Lens Technology; and Chen Xiaoshuo, CEO of Everwin Precision.

The media were quick to notice that both BYD and Everwin Precision are headquartered in Shenzhen. The city was also the home to Lens Technology, and although the company’s headquarters has been relocated, it still maintains a significant production base in Dongguan, Guangdong province.

Lens Technology became a supplier partner for Apple in 2006. BYD followed suit in 2008, and Everwin Precision joined Apple’s supply chain in 2012. All this corroborates the preeminence of Shenzhen’s mobile phone industry chain.

One can hardly find another city like Shenzhen in the world, wherein 95 percent of the components for a smartphone can be sourced within an hour’s commute. Cook spoke highly of Shenzhen, stating that there is no other place more important for Apple’s supply chain. Although Washington repeatedly calls for US semiconductor firms to move out of China, over 95 percent of Apple’s products are still assembled in the country. On the outskirts of Shenzhen, there is a host of enterprises, including Luxshare Precision, Foxconn, and BIEL Crystal, which are part of Apple’s production and supply chains and have grown significantly alongside Apple’s development.

It is widely known that Apple has been exploring new opportunities for development in countries like India. Nevertheless, China, especially Shenzhen, remains indispensable to Apple as the company analyzes other alternatives. In a bid to deepen collaboration with local suppliers in Shenzhen, Apple is set to open a new applied research laboratory later this year in the Shenzhen Park of Hetao Shenzhen-Hong Kong Science and Technology Innovation Co-operation Zone. Having invested over 1 billion yuan in this laboratory, Apple is expected to further scale up its investment with the addition of new facilities in Shenzhen.

JPMorgan Chase has forecast that by 2025, Chinese suppliers will see their share in the production of iPhone rise from approximately 7 percent in 2022 to 24 percent.

Hong Kong’s reindustrialization has been hampered by multiple factors, with the disruption and sabotage by anti-China subversives being the primary cause. If the city seeks to develop itself into an international innovation and technology (I&T) hub, it must not delink research from production. Given Hong Kong’s relatively small area and high labor and land costs, the optimal strategy is to collaborate with other cities in the Guangdong-Hong Kong-Macao Greater Bay Area, particularly with the neighboring city of Shenzhen, to develop an international I&T hub that integrates research and production.

It is suggested that the Hong Kong Special Administrative Region government thoroughly study the production and supply chains of Shenzhen and other cities in the Pearl River Delta, along with reviewing the medium- and long-term development plans of Guangdong. The study should aim to build on the current efforts to trawl for enterprises and talents to create modern production and supply chains suited for Hong Kong and its neighboring regions. This strategy is the key to fostering new quality productive forces and promoting high-quality economic growth. It is also considered as the only viable path to substantially boost Hong Kong’s economy and improve the livelihoods of its residents.

The author is a senior research fellow of China Everbright Holdings.

The views do not necessarily reflect those of China Daily.