Beijing (AsiaNews/Agencies) – Guangdong party vice-secretary Liu Yupu—a protege of President Hu Jintao—was appointed as Shenzhen's party boss yesterday, ending seven years of domination by Huang Liman and Li Hongzhong, allies of former President Jiang Zemin. Reviving local industry and relations with Hong Kong are Liu’s main challenges.

Liu worked with Mr Hu at the Communist Youth League's Central Committee from 1982 to 1985. He was elected deputy Guangdong provincial party secretary in 2004 and re-elected in May 2007.

The maximum age for officials at Mr Liu's level is 60, which means that the 58-year-old Liu is likely to be a transitional figure, put in place just to consolidate Hu’s hold on power before a new, younger leader is appointed.

For this reason Liu’s appointment has raised some eyebrows given the city’s serious problems.

Shenzhen is one of the five special economic zones launched by the late paramount leader Deng Xiaoping in the early 1980s.

It has been the beneficiary of many tax breaks and other preferential policies over the past three decades but analysts and the public have voiced concerns about barriers it faces to further growth.

Analysts say Mr Liu will have to confront three major obstacles: upgrade its electronics industry, attract talent and keep its industrial advantage despite rising costs.

Guo Wanda, vice-president of the China (Shenzhen) Development Institute, told the South China Morning Post that the core issue is greater productivity.

“Some cities, such as Hong Kong, Tokyo, and London, have high costs but are still competitive. The reason is the industries they have are highly productive,” he said.

Professor Guo said the transition would be tough because Shenzhen did not have enough land, transport infrastructure or social controls for the change. More importantly, “officials here are accustomed to following the old rules but not thinking about the new solutions,” he said.

For this reason some analysts have suggested that Shenzhen's future lies in a merger with Hong Kong. Both cities have shown a strong desire to collaborate.