Great press

A new report came out today proposing a Hong Kong-Shenzhen megapolis. Shenzhen is essentially just across the mainland China border from Hong Kong. Such a combination sounds incredible. Shenzhen is the gateway to the Pearl River delta, where millions of cheap Chinese laborers are likely making the clothes and shoes you are currently wearing. Hong Kong’s finance, shipping and shopping are a perfect match. This is of course what the government under Deng Xiao Ping was thinking when Shenzhen was first designated an Special Economic Development Zone. It’s a bit like placing Bangalore India next to Silicon Valley. It’s great – but the new report projects a potential boost of $1 trillion to the combined GDP of the region. Unless it’s a currency error, this is a whole new level of propaganda designed to tout the benefit of a fully integrated Hong Kong. The GDP of all of China is ~$3 trillion. I don’t think easing the travel restrictions of local Chinese into Hong Kong is going to boost the country’s output by a third.