Hong Kong (AsiaNews/Agencies) – In May bankruptcy petitions in Hong Kong jumped 54 per cent from a year earlier, an indicator that the recession shows is not letting up. Hong Kong's economy tipped into recession in the third quarter of last year and the government has forecast it will contract by between 5.5 and 6.5 per cent this year.
The economy of the former British crown colony has felt the effect of collapsing exports to the United States and Europe. Many Hong Kong manufacturing companies have had to shut down because of collapsing sales.
There is however a silver lining in all this. Some observers have pointed out that bankruptcy petitions numbered 1,416 last month, the lowest one since January. In April they totalled 1,490, up 56 per cent from a year earlier.
Even though economists are saying that it might be bottoming out, the economy is likely to remain weak this year.
In the meantime Shanghai’s Communist Party Secretary Yu Zhengsheng spoke to the Hong Kong media, suggesting ways for the two large urban centres to work together to overcome the current economic crisis.
Traditionally the two cities have been rivals, partly because of Shanghai’s ambition of becoming a major international finance centre.
Just last March the State Council approved guidelines to transform the city into a global financial and shipping hub by 2020, encouraging it to take bold steps in developing its capital and monetary markets.
The plan fuelled speculation that Shanghai would eventually eclipse Hong Kong, leading to a flight of capital and relocation of business.
As way to allay such fears, Mr Yu said that “Shanghai has a lot to learn from Hong Kong in terms of taxation policy, credit system, market regulations as well as lawmaking.”
“Shanghai and Hong Kong will always be complementary to each other and the growth of the two cities brings them mutual benefits,” he noted, adding that “Hong Kong and Shanghai will always be brothers.”