The Northern Metropolis (NM) development has become a hot topic throughout Hong Kong. Covering approximately 300 square kilometers, which accounts for nearly a third of Hong Kong’s landmass, the NM development is expected to span over 20 years. This is an unprecedentedly ambitious project in the history of Hong Kong.  

The NM project basically involves the creation of a vast brand-new town, requiring the simultaneous development of infrastructure, housing, and industries, as well as ecological conservation. It is a mega project that requires a development model completely different from those in the past, and needs to mobilize both local and external resources for it to succeed.

The NM development is premised on two perspectives: From the national perspective, it is strategically aligned with national priorities; from the local perspective, it is for the betterment of Hong Kong residents’ well-being and livelihoods.

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Hong Kong’s urban development started on Hong Kong Island and has gradually stretched to its surrounding areas. The NM is being built from scratch on a big area of undeveloped land. This is a new development model for Hong Kong that involves numerous challenges, including financing, zoning, industrial development, and transportation network development.

Fortunately, Hong Kong can take a leaf out of the Chinese mainland’s book, particularly the successful experiences from the development of Shenzhen and Shanghai’s Pudong district. In the late 1970s when the country’s reform and opening-up process had just started, Shenzhen was tasked to develop itself into a special economic zone.

The country was financially stretched and couldn’t afford much support for Shenzhen but special policies allowed the fledgling city to explore a new development path, which gave birth to numerous miracles.

In the early 1990s, when Pudong commenced its development into a financial center, the central government still couldn’t afford much support for it. Pudong was encouraged to follow its own innovative ways. The success of both Shenzhen and Pudong can be attributed to a break from tradition, which opened up new perspectives and allowed the two places to embark on a path of innovation.

It goes without saying that the NM development requires a development model underpinned by a broad and long-term vision that allows us to learn from the development concepts and strategies of Shenzhen and Pudong. It should also recruit capable mainland and overseas enterprises, and introduce innovative strategies and initiatives to facilitate the project. It is, moreover, vital not to let differences of “two systems” limit our perspectives. After all, both Shenzhen and Pudong adopted many capitalist practices, including those from Hong Kong.

Traditionally, Hong Kong’s urban development was led by the government; private enterprises took part only after the government had completed the development of the necessary infrastructure and planned public housing projects. This model ensures that private developers can realize profits shortly after they participate.

The NM development demands a different approach. On the one hand, the huge investment required will put further pressure on the government’s fiscal reserves which have already been strained by the COVID-19 pandemic. On the other hand, with a construction phase of 20 years, the project can’t afford further delays in development; the traditional development model would essentially protract the timeframe of development. Therefore, a new development model is imperative for the success of the NM project, under which the government and private enterprises simultaneously participate in the development process from the very beginning, with public funds primarily serving a leverage function.

Indeed, the Hong Kong Special Administrative Region government has thought of various novel strategies to attract private investment to the project, including allowing private developers to pay land premiums in installments to alleviate their financial burden, creating a joint venture between developers and the government for financing, building and operating innovation and technology parks, and adopting the Airport Authority model for managing investment promotion and other initiatives.

These ideas are commendable. The next step is to formulate workable plans. It is not that private developers are reluctant to participate in the NM development but that they are assessing the optimal timing for their participation to minimize operational risks and costs. The SAR government and developers should find a mutually beneficial cooperation model to encourage developers’ early participation in the NM development.  

Many local and State-owned enterprises, as well as foreign-owned banks, have expressed their optimism for and eagerness to take part in the NM development.

The NM development offers entrepreneurs huge opportunities to transform and upgrade their businesses. With a heavy reliance on real estate, retail and finance, Hong Kong’s industrial structure is relatively homogeneous and unsustainable in the long run. As the world has entered a new era of capitalizing on innovation and technology, business leaders who hold on to their old business model without paying heed to innovation may find themselves outmaneuvered by competitors in the future.

Since Hong Kong missed many opportunities in innovation and technology, the NM development brings tremendous opportunities. Its expansive site is well-positioned to accommodate major projects; its industrial development planning aligns with Shenzhen’s and is instrumental in strengthening the value chain. Once fully developed, the new town development will facilitate the creation of a combo of “innovation in the North, finance in the South”, wherein tech innovation and modern service sectors will reinforce each other. As part of the Guangdong-Hong Kong-Macao Greater Bay Area, the NM development has the central government’s full support. Any visionary entrepreneur can easily recognize the project’s immense potential.    

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At a symposium held last month, Xia Baolong, director of the Hong Kong and Macao Work Office of the Communist Party of China Central Committee, put forward “six aspirations” for the Hong Kong business community, including the hope that Hong Kong entrepreneurs will “pioneer innovation, proactively explore new industries and new business models, and foster new drivers of economic growth for Hong Kong”. This is not only to encourage entrepreneurs to contribute to the betterment of Hong Kong but also to find new ways to expand their own business.

The NM project is crucial to the future of Hong Kong. The SAR government, as the primary body responsible for the city’s governance, the business sector, as the main force of economic development, and all sectors of the community, as stakeholders, should join hands to facilitate the NM development.

The author is vice-chairman of the Committee on Liaison with Hong Kong, Macao, Taiwan and Overseas Chinese of the National Committee of the Chinese People’s Political Consultative Conference and chairman of the Hong Kong New Era Development Thinktank.

The views do not necessarily reflect those of China Daily.