There will be some similarity in functions, but there will also be scope for each city to develop its own characteristics as a financial centre. The logical trend in financial services, given the continuation of exchange controls on the mainland, in contrast to the free flow of capital in and out of Hong Kong, as enshrined in the Basic Law, seems to be for Shanghai to develop as China’s domestic financial centre and for Hong Kong to develop as its international financial centre. But there is no reason why they should be deliberately constrained to these roles. China has room for at least two global cities. Nor is there any reason why, in the event the mainland attains the financial and other freedoms enjoyed in Hong Kong, Shanghai should not have a go at the business of international finance, or why Hong Kong, with its highly sophisticated financial infrastructure, to facilitate efficient international as well as domestic financial intermediation, should not have a go at the RMB business. A little competition is no bad thing, as long as it is fair competition, and Hong Kong’s free enterprise is very good at it. The only residual worry is that the playing field might be a tilted one, involving subsidies and other forms of support or protection from the authorities. But WTO entry is thankfully conditional upon the removal of many of these obstacles to free and fair competition, to the advantage of those that are good at this game and are prepared to embrace it.
BIS Review 7/2007  1  Other strategies include the following: Improvements to public service •  addresses issues relating to public service and improve the delivery mechanism. About 15% of govt. revenue has been provided for administrative, regulatory and other services and improvements to the public service delivery programme to make it more responsive to public needs. In delivering public services the budget advocates to use e-governance structures which are speedier than the present rule based structures. •  promotes productivity and request public service to eliminate waste and duplication while encouraging to complete activities which have already begun by spending agencies before venturing into new areas. To further facilitate the completion of unfinished work, the budget enables the roll over of all unspent provisions of previous years to the ensuing year. •  addresses the welfare issues of selected community groups and measures to extend the safety nets. Reopening of closed factories and revival of failed businesses In the 2007 budget, the fiscal arm has been extended to promote the re-opening of closed factories, abandoned companies and business entrepreneurs which can be revived through provision of debt relief, 3 year tax holidays and an exemption from economic services tax for a period. The budget proposes to grant Rs. 2 bn. to Lankaputhra Development Bank which will provide equity or debt to such factories on the basis of solid restructuring plans. These efforts will also increase employment throughout the country.