Hong Kong cozies up to Shenzhen in border swamp

HONG KONG — It’s the story of an obscure fishing community that was afforded special trading status and grew to become one of the world’s most vibrant economic centers.

Then came competition. Just upriver, an even more obscure fishing community was afforded special trading status and soon grew to become one of the world’s most vibrant economic centers.

The first was Hong Kong, which rose rapidly after being made a free port in the mid 19th century, becoming a model for free-market capitalism by the time of its return to China 20 years ago. In the past two decades, it has watched the dazzling rise of Shenzhen, just across the Sham Chun River.

Now, officials in Hong Kong have an ambitious proposal to link the two via a technology park on a disputed swamp by the border that aims to revitalize Hong Kong’s sagging economy and add fuel to Shenzhen’s nascent start-up boom.

The proposed 87-hectare park, called the Lok Ma Chau Loop, is the largest proposal of its kind by Hong Kong and is being pitched as an incubator for future tech giants. The idea is that tenants would be close to Shenzhen’s cheaper manufacturing and innovation, while retaining Hong Kong’s legal and business framework and internet freedom, with eased border crossings between the two.

The plan says as much about the changing roles of the two cities as it does about Hong Kong’s aspirations to be a technology womb.

Shenzhen is pivoting from its legacy as ground zero for China’s manufacturing boom into a center for research, development and production of advanced technology. Hong Kong is trying to diversify from old staples such as banking and real estate as revenue streams in shipping and tourism slacken.

“Hong Kong has to do this,” said Albert Wong, chief executive officer of Hong Kong Science and Technology Parks Corp., the government agency that runs the city’s biggest existing technology park and startup incubators. “It’s not an option.”

Sitting in his office at the city’s lush science park, half way between the border and the financial center, Mr. Wong maps out a vision that doesn’t lack for ambition. He wants to more than double the number of researchers and developers at HKSTP to 20,000 over the next five years.

The Loop is key to that expansion. The park would be built on land that was part of China until the government straightened the Sham Chun River in the 1990s to reduce flooding, effectively moving the border. The marshy area enclosed by the loop of the old river course remained disputed and undeveloped — an area of wetland for otters and migrating birds — until an agreement in January by the two governments to build the tech park.