jornal

8 Cross-boundary integration in Hong Kong and Shenzhen1

Introduction In the age of globalization, dramatic spatial restructuring spurs the emergence of cross-border regions and new forms of regional integration (Perkmann 2003; Bun- nell et al. 2006; Otgaar et al. 2008; Shen 2011). Regional integration in boundary areas is a comprehensive process involving economic, political and social dimen- sions of integration.

Hong Kong and Shenzhen, the Pearl River Delta (PRD) in general, have formed a dense regional production network since 1978. Political history, kinship and business ties have facilitated close economic integration in the region (Grundy- Warr et al. 1999: 309). The implementation of “one country two systems (OCTS)” in Hong Kong after 1997 also distinguishes this region from other cross-border regions (Sparke et al. 2004; Shen 2004; Yeung and Shen 2008).

Scholars have used the model of “front shop, back factory” to describe the economic relationship between Hong Kong and the PRD (Chen 2007; Chan 1998; Li 1998; Sit 1998; Cheung 2006). The economic integration has been driven by businessmen and residents. But cooperation at government level was not smooth before 2001. Since then, the HKSAR government has become increasingly active in enhancing government-to-government cooperation with PRD. Before 1997, the Hong Kong government did not ever consider the interest of the Hong Kong–PRD as a whole city-region, with little investment in the cross-border infrastructure (Cheung 2005). But even after 1997, scholars pointed out that some HKSAR offi- cials were concerned that close economic integration could undermine the politi- cal autonomy of the HKSAR (Rohlen 2000). Scholars found fierce competition in ports and airports in the region (Song 2002; Chen 2007). Cheung (2006) argued that different perspectives in Hong Kong and Guangdong are major constraints for cross-boundary cooperation.

Previous studies on regional integration in Hong Kong–PRD region and Hong Kong–Shenzhen region mainly focused on economic cooperation (Chen 2007; Yang 2005; Sit 1998). The effect of social integration and the politics of cross- border governance are largely ignored with a few exceptions (Lin and Tse 2005; Shen 2004).

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By tracing the process of Hong Kong and Shenzhen integration during the past three decades, Luo and Shen (2012) found three stages in Hong Kong–Shenzhen regionalization – namely, the emergence of informal regional society from below, transitional regional society and formal regional society. The changing relation between Hong Kong and Shenzhen/PRD region has also been considered in the context of rising China and internal social and economic conditions in Hong Kong (Shen and Luo 2013). Economically, PRD and Shenzhen have become stronger with a growing service sector, which has important implications to Hong Kong. But there is little study on the political and cultural differences between Hong Kong and mainland China and their impact on Hong Kong–Shenzhen integration.

This chapter will use Hong Kong and Shenzhen as a case study to examine the status and relations of economic integration, institutional integration and social integration. The integration of cross-border communities that share common value and identity is considered the most advanced form of cross-border integra- tion as economic or institutional integration can be motivated just by economic or political interest and may not ensure social integration. Thus it is used as a key criterion to assess whether Hong Kong–Shenzhen is really a twin city. Economic and trading statistics, government documents and first-hand survey data will be used in this study.

The main research questions are as follows. Are the economic, institutional and social integration processes progressing at the same pace? Have the economic and institutional integrations enhanced social integration? How do political and cultural factors and OCTS affect regional integration? Is Hong Kong–Shenzhen really a twin city?

The remainder of this chapter is organized as follows. The next section reviews the conceptual advancement in the study of borderland and the integration of cross-border regions. The next three sections examine the regional economic inte- gration, institutional integration and integration of cross-border communities in Hong Kong–Shenzhen region. Some conclusions are reached in the final section.

Borderland and integration of cross-border regions Significant regional economic integration has taken place in many cross-border regions, e.g., Hong Kong–PRD region, Indonesia-Malaysia-Singapore growth tri- angle and the US-Mexico border (Chen and Ho 1994; Grundy-Warr et al. 1999; Shen 2003; Bunnell et al. 2006; Sparrow 2001). Such cross-border regional integration, called subregionalism or micro-regionalism, is a subset of regional projects which have been examined from the popular perspective of “new region- alism,” emphasizing an open and multidimensional system with multiple (state and social) actors (Hettne 2003).

Based on the literature on borders, boundaries, frontiers and borderland regions, Brunet-Jailly (2005) suggests a comprehensive framework with four equally important analytical lenses: (1) market forces and trade flows, (2) policy activities of multiple levels of governments on adjacent borders, (3) the particular politi- cal clout of borderland communities and (4) the specific culture of borderland

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communities. The main hypothesis of the theory of borderland studies proposed by Brunet-Jailly is, if each analytical lens enhances or complements one another, what emerges is a borderland region that is culturally emerging and integrating. This hypothesis has not been fully tested in previous studies. The findings from Hong Kong–Shenzhen region can shed light on the complex relations among the economic, institutional and social processes of cross-border integration.

An integrated borderland means the development of genuine transnational institutions and a more complete harmonization of regulatory systems (Grundy- Warr et al. 1999: 322). Brunet-Jailly (2005) pointed out that a borderland that is economically, politically and culturally emerging, and integrating is an ideal case. The literature documents many cases with local tensions, despite shared infra- structures and strong economic linkages (Bunnell et al. 2006; Otgaar et al. 2008). Grundy-Warr et al. (1999) argued that the growth triangles in Asia lag behind Europe and North America in transboundary cooperation because of the lack of bottom-up initiatives, and they tend to move toward “interdependent” rather than “integrated” borderland with no institutional innovation.

The economic, institutional, political and social processes of integration in cross-border regions have been studied separately, although there are interactions among these processes. The concept of “cross-border regional production sys- tems,” focusing on economic integration, has been used to describe the cross- border regions in Asia (Tsui-Auch 1999; Shen 2003). Such a system involves at least two countries with one well developed and the other one underdeveloped. The two countries have different factor endowments and the subsequent develop- ment will mainly take place in the border region of the less developed country where abundant cheap land and labor are available. A spatial division of labor will be developed (Sit 1998). Nevertheless, regional economic integration and coop- eration has never been a smooth process as each side has its own economic inter- est (Barter 2006). In cross-border regions of North America, intra-metropolitan regional competition is common (Brunet-Jailly 2004). Similar competition ten- sion exists in the development of airports, container ports and cross-boundary infrastructure in Hong Kong–PRD region (Shen 2008a). One functionalist expla- nation is that competition prevails, fostering competitiveness and distrust, as “cit- ies have very few policy options” (Peterson 1981: 111).

Recent studies have paid increasing attention to political and social dimen- sions of integration. The geopolitical concerns can constrain and limit the process of economic integration. In the study of Indonesia-Malaysia-Singapore growth triangle, Grundy-Warr et al. (1999: 306) concluded that countries are not willing to compromise national sovereignty for the sake of the development of a func- tionally integrated cross-border economy. The growth triangle is characterized by cooperation without institutional innovation or many changes in regulatory framework, national security enhancing instead of the loss of sovereignty and incremental intraregional cooperation.

Another useful concept of “bi-national city” refers to urbanized borderland communities. The bi-national city is “divided” by a national border, but shares a common hinterland and whose inhabitants have a sense of belonging together

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(Ehlers and Buursink 2000). The term goes beyond nationalism and creates a common cross-border identity. The concept stresses the utopian aspect of cross- border integration (Ehlers 2001). Not many cross-border regions have reached such an ideal stage.

Bunnell et al. (2006) documented the agency and struggle in the context of Singapore’s cross-border urban expansion into adjacent parts of Indonesia. The indigenous villagers in Bintan were disrupted. Franz and Hornych (2010) exam- ined the conditions that ease or complicate cooperation between municipalities with a case study on the “Saxony triangle.” Sparrow (2001) concluded that the relationship between San Diego and Tijuana is driven by factors of economics not trust. Following over 100 years as neighbors, the two cities are still learning to coexist with each other.

While a bi-national city involves national borders, a more general term is “twin city,” which includes closely integrated cities between countries or within a coun- try. The territorial integration of two cities can be tested by following question: what is the emotional and mental “togetherness” of the two urban communities, on the side of their politicians, administrators and residents (Buursink 1996)?

Following the twin city model, four steps or stages in the progress of territo- rial integration are proposed by Sparrow: Step 1, physical integration; Step 2, behavioral integration; Step 3, organizational integration; and Step 4, politico- administrative integration (Buursink 1996). Although one step may not follow the next step exactly in the cross-border integration, the early steps are easier and more likely to be achieved and later steps are more difficult but also representing more close and advanced integration. Cross-border cities can be tested to find out the extent of cross-border integration, which stage they have reached and whether they can be called a twin city.

In the study of cross-border integration involving geopolitical and geoeco- nomic power relations, one useful concept is TSE. TSE is a nexi of social and political relations that projects a coherent identity to a space. The concept was applied to cross-border regions by Sum (2001) and to Hong Kong–PRD region by Shen (2004). The TSE concept will be used in the analysis of the effect of political and cultural factors on cross-border integration in this chapter.

Following the earlier discussions, the territorial integration of two cities can be evaluated in terms of economic integration, institutional integration involving cross-border cooperation between governments and integration of cross-border communities that share a common identity and value system. The interaction among the three subprocesses is likely to be complicated with many possibilities. For example, the integration of cross-border communities may be delayed, partial or not happen at all even under rapid economic integration.

Hong Kong and Shenzhen are two major Chinese cities governed by OCTS under basic law. This makes the case distinctive from other cross-border regions. The general term of “twin cities” can be adopted to analyze the territorial integra- tion of the two cities. Hong Kong has an area of 1,108 km2 and a population of 7.07 million in 2011 (Figure 8.1). Hong Kong was a colonial city from 1841 to 1997, and it has become an SAR of China with high autonomy since 1997. OCTS

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has been implemented in Hong Kong. Hong Kong and mainland China have a special political relationship. Generally, Hong Kong remains a quasi city-state, like Singapore, with its own money, immigration and customs control, and a full member of WTO. Hong Kong has emerged as an advanced service center for China since 1978 when China introduced economic reforms and the open door policy.

Shenzhen city origins from the SEZ set up by China on the border area near Hong Kong in 1980. The total area of Shenzhen city is 1991.64 km2. The area of the Shenzhen SEZ was 417.16 km2 before July 2010, and it has been extended to the whole city since then. The city had a population of 10.37 million in 2010 (SSB and NBS Survey Office in Shenzhen 2011). There was border control between Shenzhen SEZ and the rest of China in the 1980s and 1990s. This control was abolished after the extension of SEZ area to the whole city. Shenzhen SEZ was established to make use of capital from Hong Kong as well as to prepare the return of Hong Kong to China in 1997. Cross-border integration of Hong

Figure 8.1 Map of Hong Kong and Shenzhen showing RLA and western express line

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Kong–Shenzhen region exemplifies Hong Kong’s unique political and economic relation with mainland China.

This chapter attempts to examine the pace and interaction of economic, institu- tional and social integrations, and whether a twin city, with a high degree of inte- gration, has been formed in Hong Kong–Shenzhen region. It will also reveal how political and cultural factors have affected the regional integration in the region.

Urban economic integration: FDI and trade between Hong Kong and Shenzhen Economically, Hong Kong and Shenzhen have been well integrated since 1980, forming one of the most economically integrated cross-border regions in the world (Ohmae 1995; Chen and Ho 1994; Chen 2007; Chan 1998; Sit 1998). Such close economic integration can be shown clearly using investment and trade indicators between the two cities.

Hong Kong plays an important role in foreign direct investment (FDI) and international trade of mainland China. A large portion of Hong Kong FDI goes to Shenzhen. Shenzhen received 27.1% of Hong Kong FDI to mainland China in 1986, 8.1% in 1997 and 7.1% in 2010. Hong Kong is the major source of foreign capital in Shenzhen, accounting for 78.9% in 1986, 70.7% in 1997 and 59.3% in 2010 (Shen 2008b; SSB and NBS Survey Office in Shenzhen 2011).

Shenzhen’s export grew from US$9.9 billion in 1991 to US$25.5 billion in 1997 and US$204.2 billion in 2010 (Table 8.1). It contributed 12.9% of the total export of China. More importantly, FDI and Hong Kong investors play a signifi- cant role in the growth of export in Shenzhen. Outward processing related export accounts for the bulk of export from Shenzhen. In 2010, the outward process- ing related export reached US$117.4 billion and the export by FDI firms was US$120.8 billion. A high proportion of Shenzhen’s export went to Hong Kong, mostly re-exported to other markets then. Shenzhen to Hong Kong export grew from US$9.3 billion in 1991 to US$84.4 billion in 2010. It is useful to note that such export increased by three times from 1997 to 2010. Its share in the total export from mainland to Hong Kong was 29.0% in 1991 and 38.7% in 2010 (NBS 2011; SSB 2006; SSB and NBS Survey Office in Shenzhen 2011). Clearly, Shen- zhen is a major destination for FDI, outward processing, re-export and logistics activities of Hong Kong companies. Shenzhen and Hong Kong are important eco- nomic and trade partners.

Another major role of Shenzhen is as a gateway of economic integration of Hong Kong and mainland China. Both Hong Kong and mainland companies can use Shenzhen as a base for their cross-boundary activities. For example, many mainland companies and local governments have set up their branches or offices in Shenzhen. Many Hong Kong banks have also set up branches in Shenzhen to expand their services.

Clearly, the economies of Hong Kong and Shenzhen are deeply integrated and mutually dependent, possibly deeper than any other cross-border regions in the world. This has been achieved by active promotion of a local development state in

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Shenzhen and active investment by the business sector from Hong Kong. OCTS has a positive contribution to economic integration by various favorable measures such as CEPA (Yeung and Shen 2008).

Institutional integration: inter-city cooperation led by city governments According to the twin city model, politico-administrative integration is an impor- tant step in the progress of territorial integration. Indeed, geopolitical concerns often constrain and limit rather than facilitate the process of economic integration in many cases in the world (Grundy-Warr et al. 1999; Aguiar 2012).

Sum’s (2001) multiple TSE approach has been used to study the geopolitical and geoeconomic power relations in Hong Kong (Shen 2004). It is proposed that there are two competing geoeconomic TSEs, pro-economic integration TSE and anti-economic integration TSE, and two competing geopolitical TSEs, nationalist TSE and political distancing TSE, in Hong Kong. They have different economic interests and political agenda. The interaction, confrontation and dynamics of these TSEs determine Hong Kong’s path in its cross-boundary relationship with Shenzhen and the mainland China in general. HKSAR government anxiously and actively attempted to resist close regional integration across the Hong Kong– Shenzhen boundary in the period of 1997–2000, even after the return of Hong Kong to China.

As a British colony up to 1997, a colonial geopolitical TSE dominated Hong Kong although a nationalist TSE always existed. Politically, it was natural for Hong Kong government and politicians to keep distance from the Chinese govern- ment. The cross-boundary relation between Hong Kong and Shenzhen/mainland China can be characterized as separation in the cold war period of 1949–1978. A pro-integration TSE emerged in Hong Kong after 1980, when China imple- mented open door policies and Shenzhen SEZ was designated. But there was no

Table 8.1 Export of Shenzhen and the share of Shenzhen to Hong Kong export 1991–2010 (US$ billion)

Year Total export Export related to outward processing

Export of FDI firms

Shenzhen to Hong Kong export

Share of Shenzhen to Hong Kong export in Shenzhen total export (%)

Share of Shenzhen to Hong Kong export in China to Hong Kong export (%)

1991 9.9 8.7 3.5 9.3 94.4 29.0 1997 25.5 21.1 14.1 21.2 83.1 48.4 2005 101.5 75.5 67.6 45.1 44.4 36.2 2010 204.2 117.4 120.8 84.4 41.4 38.7

Data sources: NBS (2006, 2011); SSB (2006); SSB and NBS Survey Office in Shenzhen (2011).

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synergy between the pro-economic integration TSE and colonial geopolitical TSE as political indifference persisted between the governments on both sides of the border.

The 1997 handover intensified rather than reduced the struggle between the two political TSEs. The local and international confidence in the future of Hong Kong was fragile after 1997. Political separation between Hong Kong and the main- land was desired, strengthening the political distancing TSE. The society in Hong Kong was divided politically into pro-Beijing and anti-Beijing camps after 1997. In the meantime, Hong Kong and mainland China adopt capitalist and socialist systems, respectively, under “one country.” Although Chinese language and cul- ture are popular in Hong Kong, there are significant gaps in the value system and ideology between Hong Kong and Shenzhen/mainland China, which is confirmed by residents surveys reported in the next section.

With the end of British colonial rule, the concern over Hong Kong’s autonomy and protection of local identity, in place of geopolitical concern and national sov- ereignty in other cases, constrain significantly the institutional and social integra- tion between Hong Kong and Shenzhen (Cheung 2006). This section focuses on the institutional integration at government levels.

After the return of Hong Kong to China, Shenzhen city attempted to develop a close relation with Hong Kong at government level. But the HKSAR govern- ment was skeptical of most suggestions from Shenzhen side and did not actively move toward cooperation, showing resistance and protectionism against closer cross-boundary integration. There are both political and economic reasons. First, some politicians and HKSAR officials were concerned that close economic inte- gration could undermine the political autonomy of HKSAR. The political distanc- ing TSE reinforced the anti-economic integration TSE. Second, the 1997 Asian Financial Crisis (AFC) made the government even more conservative about close cross-boundary integration. At that time, it was considered that the shopping and consumption in Shenzhen by many Hong Kong residents would affect Hong Kong’s local economy negatively. The HKSAR government did not introduce the 24-hour operation for passengers in Lok Ma Chau boundary control point until 2003 (Yeung and Shen 2008). The existence of institutional barrier against eco- nomic integration was an outstanding feature of Hong Kong–Shenzhen relation in the 1990s.

The year 2001 was indicative of a fundamental shift of HKSAR government’s position toward the cooperation and development in the Hong Kong–Shenzhen/ PRD region (Shen 2011). After China’s WTO entry, the argument that Hong Kong would suffer from close economic integration was outweighed by the argument that close economic integration would benefit Hong Kong. The resignation of Ms. Chan as the chief secretary in 2001 was also an important factor in the change of government attitude. Ms. Chan was quite conservative on regional integration with the PRD. Her successor, Mr. Donald Tsang, was a senior civil servant with much administrative experience. He cooperated well with Chief Executive Mr. Tung Chee-hwa, who was keen to enhance regional integration. This has made communication with mainland authorities much easier.

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The HKSAR government proposed to establish a free trade zone between HKSAR and the mainland on 20 December 2001. This was called CEPA later, which was signed in 2003. The central government of China introduced many favorable policies to boost Hong Kong economy. HKSAR government moved on quickly to enhance regional integration. In 2004, Hong Kong and Shenzhen city governments signed the Memorandum on Close Cooperation between Hong Kong and Shenzhen and eight other cooperation agreements. Two governments formally agreed to embark on deep inter-city cooperation aiming to form Hong Kong–Shenzhen Metropolis. Hong Kong–Shenzhen Cooperation Forums was first held in 2006 (Hong Kong Economic and Trade Office 2007). Two outstand- ing inter-city cooperation projects led by governments are the boundary area development and airport cooperation.

The Shenzhen River divides two cities. The Shenzhen side is well developed. Shenzhen likes to take full advantage of being close to Hong Kong, which is a leading business center. But the Hong Kong side of the boundary is not developed. Hong Kong maintains a Frontier Closed Area (FCA) as a buffer zone between the two cities. It was set up in 1951. No development is allowed in the area.

One outstanding case of boundary area development is the Lok Ma Chau river loop area (RLA), about 1 km2. This area was originally within the Shenzhen side of the boundary. In the 1990s, an improvement project was implemented in Shen- zhen River to reduce flooding. As a result, the RLA fell within the Hong Kong side of the boundary after the completion of the project in April 1997. The land in the RLA is owned by Shenzhen, but is under the jurisdiction of Hong Kong (Figure 8.1). Shenzhen has great interest to develop the RLA as a strategic project. Nevertheless, Hong Kong had no plan to implement any substantial land develop- ment there until 2008.

Since 2001, both governments have been seeking ways to move on the inter- city cooperation. Previously, Hong Kong was more active than Shenzhen in the airport cooperation, while Shenzhen was more active than Hong Kong in the boundary area development. Thus the two projects have been moved ahead as both cities can benefit from cooperation. As one project may not benefit two cities equally, this case shows that two cities can cooperate in multiple projects to reach win-win situation. This is a useful experience from the region.

A Hong Kong/Shenzhen cooperation meeting was held in Hong Kong in December 2007. The meeting decided to set up two joint task forces – namely, the “Task Force on Airport Co-operation between Hong Kong and Shenzhen” and the “Hong Kong–Shenzhen Joint Task Force on Boundary District Development” to accelerate collaboration on two projects.

The two governments agreed to develop the RLA jointly as an experimental project of inter-city cooperation. The Task Force on Airport Co-operation would study the feasibility and economic benefits of connecting the two airports with a rail link and pursuing airport business cooperation, respectively. The rail link will link two airports in 23 minutes so that passengers can transfer between Hong Kong and Shenzhen airports conveniently. It is now named Hong Kong–Shenz- hen Western Express Line, adding two middle stops (Figure 8.1).

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Close relations have been established between Hong Kong and Shenzhen at the government level. Hong Kong–Shenzhen Co-operation Meetings have been held every year since 2007 to advance inter-city cooperation in various areas. The Hong Kong–Shenzhen Co-operation Forums have been held every year since 2006, except 2008, for discussion and sharing among academic and various social organ- izations in two cities. For example, the 2011 Hong Kong/Shenzhen Co-operation Meeting was co-chaired by Chief Secretary for Administration Mr. Stephen Lam and the mayor of the Shenzhen Municipal Government Mr. Xu Qin (The Informa- tion Services Department of HKSAR Government 2011). Top officials from the two cities reviewed the progress of the past year, and conducted detailed discussion on cooperation in a number of key areas, such as Qianhai development, financial services, trade, industries, cross-boundary infrastructure and livelihood issues. Four cooperation agreements were signed before the meeting: “Co-operation Arrangement on Legal Matters,” “Co-operation Agreement on Jointly Taking For- ward the Development of the Lok Ma Chau Loop”; “Co-operation Agreement on Enhancement of Safety of Imported and Exported Food” and “Long-Term Co- operation Agreement in Numerical Weather Prediction Technology.”

It is noted that the notion of Hong Kong–Shenzhen Metropolis is not equal to the utopian vision of twin city. According to the Bauhinia Foundation Research Centre, the basic objective of Hong Kong–Shenzhen Metropolis is to achieve a freer flow of goods, capital, labor and information rather than a complete free flow of these factors because of the constraints of OCTS (BFRC 2007). Nevertheless, the aforementioned government-led, inter-city cooperation indicates significant, although limited, progress in institutional integration.

Lagged integration of cross-border communities: inadequate understanding and significant differences Have close economic integration and limited institutional integration resulted in close social integration in the Hong Kong–Shenzhen region? This will happen if Brunet-Jailly’s (2005) main hypothesis of the theory of borderland studies is valid. Resident surveys are conducted in Hong Kong and Shenzhen to reveal the condi- tion of cross-border communities. The Hong Kong survey was conducted during the evenings (6:00–10:30 p.m.) of 30 January–4 February 2008 via the Telephone Survey Research Laboratory at the Chinese University of Hong Kong. An ini- tial 7,000 random residential telephone numbers were generated and approached. Some 1,180 households answered the phone. But 183 households had no suitable respondents and 487 respondents refused to do the survey. The survey obtained a random sample of 510 respondents aged 18 years and above with a response rate of 51.2%, excluding households that had no suitable respondents. The Shenzhen survey was conducted during 15–25 February 2009 in the SEZ via a street survey in the main commercial centers and residential areas in all districts. The survey obtained 508 valid respondents aged 18 years and above.

The surveys collected data on the traveling behavior, the familiarity with the other city, the perceived impact, the degree of support and the main barriers to the

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project of Hong Kong–Shenzhen metropolis. The first-hand survey data make it possible to examine the complicated perceptions and realities of the cross-border community. Cross-tabulation analyses are also conducted to examine the impact of traveling behavior on familiarity with the other city, the perceived impact and the degree of support of the project of Hong Kong–Shenzhen metropolis.

The surveys reveal that Hong Kong residents travel to Shenzhen more fre- quently than Shenzhen residents travel to Hong Kong. As many as 93.9% of the Hong Kong sample visited Shenzhen in the past year. Some 22.7% of Hong Kong sample visited Shenzhen at least once a month, and they were considered frequent visitors. Others who visited Shenzhen occasionally were considered not frequent visitors. Only 5.7% of the Hong Kong sample had never visited Shenzhen. In contrast, just 52.4% of the Shenzhen sample visited Hong Kong in the past year. Only 7.7% of the Shenzhen sample were frequent visitors. As high as 38.6% of the Shenzhen sample had never visited Hong Kong.

The difference in travel frequency is affected by the travel regulations. The majority of Hong Kong residents have Chinese nationality, and they can travel to mainland China any time using “home visit cards.” Shenzhen residents are more restricted in their visits to Hong Kong. Shenzhen residents with local hukou could only apply for travel permit to visit Hong Kong one to two times every three month, seven days for each visit before April 2009. A similar policy has been extended to Shenzhen residents without Guangdong hukou since December 2009, and they can visit Hong Kong once every three months. Since April 2009, Shen- zhen residents with local hukou could apply for travel permit to visit Hong Kong multiple times, seven days for each visit (Tsang 2010). This new policy can help these Shenzhen residents to visit Hong Kong more easily. But the majority of Shenzhen residents do not have local hukou, and they cannot apply for such per- mits for multiple visits. One important issue is whether the frequency of visits affects residents’ familiarity with another city.

Indeed, most Hong Kong and Shenzhen residents are not familiar with the other city, indicating that the cross-border urban communities have not been well integrated (Table 8.2). In the Hong Kong sample, only 7.7% of the residents said that they are familiar or very familiar with Shenzhen city. Some 37.6% of resi- dents are not familiar with Shenzhen, and 20.3% of residents are very unfamiliar with Shenzhen. In the Shenzhen sample, a higher proportion of residents, 13.3%, are familiar or very familiar with Hong Kong. Some 53.3% of residents are not familiar with Hong Kong and 8.4% of residents are very unfamiliar with Hong Kong. Traveling behavior has a significant effect on the knowledge and possible mutual understanding of a city. As high as 19.9% of frequent visitors from the Hong Kong sample are familiar or very familiar with Shenzhen. Some 36.8% of frequent visitors from the Shenzhen sample are familiar or very familiar with Hong Kong. There are only two Hong Kong respondents whose answer is “do no know/not sure” to the question of visiting frequency, and they are excluded from the analysis. There are 44 Shenzhen respondents whose answer is “do no know/not sure” to the question of visiting frequency. As shown in Table 8.2, their familiarity with Hong Kong is close to those who have never visited Hong

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Kong. They may have never visited Hong Kong or have only visited Hong Kong occasionally.

Although Hong Kong residents travel more to Shenzhen, they are less familiar with the other city than Shenzhen residents. There are two possible explanations. First, Shenzhen residents may have great interest in Hong Kong. They can get experience and learn about Hong Kong during shopping and sightseeing in Hong Kong. Second, information flow is asymmetrical. Hong Kong TV channels are broadcasted and watched widely in Shenzhen. Shenzhen residents receive rich information from Hong Kong. But only satellite TV channel from Shenzhen is broadcasted in Hong Kong, and few Hong Kong residents watch its programs. Hong Kong residents are well served by Hong Kong–based, media which covers news and developments in mainland China. Shenzhen is not the main focus of such media coverage. It is also noted that these data are based on self-evaluation. Residents’ perceived familiarity may not reflect the actual knowledge of a city exactly.

Nevertheless, with the rising Chinese economy and close economic integration between Hong Kong and Shenzhen, residents in both cities are very positive about the governments’ proposed project to develop a well-integrated Hong Kong– Shenzhen metropolis (Table 8.3). Over 69.8% and 88.4% of the Hong Kong and

Table 8.2 How familiar are you with the social, political and economic systems and situa- tions in Hong Kong or Shenzhen by frequency of visiting?

Frequency of visiting

Choice

Very unfamiliar

Not familiar

Average Familiar Very familiar

Do no know/not sure

Number of respondents

Hong Kong respondents on Shenzhen (%)

Never 37.9% 37.9% 17.2% 6.9% 0.0% 0.0% 29 Not

frequent 21.2% 42.4% 31.4% 3.0% 1.1% 0.8% 363

Frequent 12.9% 22.4% 45.7% 15.5% 3.4% 0.0% 116 Total 20.3% 37.6% 33.9% 6.1% 1.6% 0.6% 508

Shenzhen respondents on Hong Kong (%)

Never 12.9% 60.8% 13.9% 9.3% 0.0% 3.1% 194 Not

frequent 4.4% 49.6% 30.1% 12.8% 1.3% 1.8% 226

Frequent 5.3% 31.6% 26.3% 28.9% 7.9% 0.0% 38 Do no

know/ not sure

11.4% 54.5% 22.7% 6.8% 0.0% 4.5% 44

Total 8.4% 53.0% 22.9% 12.2% 1.2% 2.4% 502

Data source: Author survey

Note: There is a significant difference in familiarity by frequency of visiting. Significance level 0.05.

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Shenzhen samples support/strongly support the project, respectively. Shenzhen residents are even more enthusiastic than Hong Kong residents in the sample: 30.0% strongly support the project and only 7.6% do not support the project, respectively. The traveling behavior has significant effect on Shenzhen residents’ support of the project. Frequent visitors to Hong Kong support the project more strongly.

This can be compared with residents’ perception of the impact of Hong Kong– Shenzhen integration on Hong Kong and Shenzhen. Some 61.8% and 65.4% of the Shenzhen sample believe that Hong Kong–Shenzhen integration will have a positive impact on Hong Kong and Shenzhen, respectively, and Shenzhen will

Table 8.3 Do you support the construction of Hong Kong–Shenzhen metropolis (by perceived impact on own city)?

Choice Do not support strongly

Do not support

Support Support strongly

Have not heard about “Hong Kong– Shenzhen metropolis”

Do not know/ not sure

Number of respondents

Share (%)

Hong Kong respondents (%)

Negative impact

2.8% 35.2% 50.9% 1.9% 5.6% 3.7% 108 21.2%

No impact

0.0% 6.5% 79.3% 4.3% 5.4% 4.3% 92 18.0%

Positive impact

0.9% 8.5% 66.4% 7.7% 9.8% 6.8% 235 46.1%

Do not know/ not sure

4.0% 8.0% 61.3% 2.7% 12.0% 12.0% 75 14.7%

Total 1.6% 13.7% 64.7% 5.1% 8.4% 6.5% 510 100.0%

Shenzhen respondents (%)

Negative impact

6.3% 18.8% 31.3% 12.5% 12.5% 18.8% 16 3.2%

No impact

2.2% 2.2% 60.0% 31.1% 0.0% 4.4% 45 8.9%

Positive impact

5.2% 0.6% 56.2% 36.5% 0.3% 1.2% 329 65.4%

Do not know/ not sure

2.7% 8.8% 68.1% 13.3% 0.9% 6.2% 113 22.5%

Total 4.4% 3.2% 58.4% 30.0% 0.8% 3.2% 503 100.0%

Data source: Author survey

Note: There is a significant difference in the degree of support by the perceived impacts on own city by Hong Kong and Shenzhen residents. Significance level 0.05.

166 Cross-boundary integration

receive more positive impact than Hong Kong. Cross-tabulation analysis shows that the traveling behavior has a significant effect on the perceived impact on Hong Kong and Shenzhen per Shenzhen residents. Frequent visitors from Shenzhen are less likely to believe that Hong Kong–Shenzhen integration will have a nega- tive impact on Shenzhen and a positive impact on Hong Kong. The perception of the Hong Kong sample is not so positive. Although 46.1% of the Hong Kong sample believe that Hong Kong–Shenzhen integration will have a positive impact on Hong Kong, 21.2% and 18.0% of them believe that Hong Kong–Shenzhen integration will have a negative impact or no impact on Hong Kong, respectively (Table 8.3). The traveling behavior has no significant effect on Hong Kong resi- dents’ support of the project and their perceived impact on Hong Kong.

There are more residents who support the construction of Hong Kong–Shenzhen metropolis than residents who perceive a positive impact of Hong Kong–Shenzhen integration. Among residents who believe that the project has a negative impact, 52.8% of 108 Hong Kong residents and 7 out of 16 Shenzhen residents still sup- port or strongly support the project (Table 8.3).

Clearly, Hong Kong society is divided regarding the interest in close coopera- tion and integration with Shenzhen. Many Hong Kong residents do not support close integration of Hong Kong and Shenzhen. This is also revealed in their views on allowing Shenzhen residents to travel to Hong Kong more easily (Table 8.4). Over 50% of the Hong Kong sample support or strongly support allowing Shen- zhen residents to come to Hong Kong for studying, sightseeing or doing busi- ness more easily. A similar share of the Hong Kong sample supports or strongly

Table 8.4 Views of Hong Kong residents on allowing Shenzhen residents coming to Hong Kong more easily by frequency of visiting

Frequency of visiting Shenzhen

Choice

Strongly disagree

Disagree agree Strongly agree

Don’t know/ not sure

Number of respondents

Allowing Shenzhen residents coming to Hong Kong for studying, sightseeing or doing business more easily* (%)

Never 6.9% 27.6% 58.6% 6.9% 0.0% 29 Not frequent 10.2% 36.9% 44.9% 2.8% 5.2% 363 Frequent 6.1% 22.8% 57.0% 4.4% 9.6% 114 Total 9.1% 33.2% 48.4% 3.4% 5.9% 506

Allowing Shenzhen residents with university degree coming to work in Hong Kong (%)

Never 6.9% 37.9% 51.7% 3.4% 0.0% 29 Not frequent 8.0% 33.3% 47.4% 2.5% 8.8% 363 Frequent 4.3% 27.6% 54.3% 4.3% 9.5% 116 Total 7.1% 32.3% 49.2% 3.0% 8.5% 508

Data source: Author survey

Note: * There is significant difference by frequency of visiting. Significance level 0.05.

Cross-boundary integration 167

supports making it easier for Shenzhen residents with university degrees to work in Hong Kong. But over 39% of the Hong Kong sample does not support such measures. The traveling behavior has no significant effect on Hong Kong resi- dents’ views on allowing Shenzhen residents with university degrees to more eas- ily come to work in Hong Kong. But it has a significant effect on Hong Kong residents’ views on allowing Shenzhen residents to travel to Hong Kong more easily. Frequent visitors to Shenzhen in the sample are less likely to oppose allow- ing Shenzhen residents to travel to Hong Kong more easily. But even among these Hong Kong residents, 28.9% oppose the aforementioned measure. Clearly, many Hong Kong residents do not want to open the city to Shenzhen residents freely.

It is well understood in Hong Kong and Shenzhen societies that two cities have many differences that may make it difficult to achieve full integration (Shen 2011). This is also the reason why OCTS has been adopted in Hong Kong and Shenzhen/ mainland China. According to our surveys, as many as 46.4% and 40.7% of the Hong Kong and Shenzhen samples consider that their different value systems are a main barrier to the construction of a Hong Kong–Shenzhen metropolis. Some 37.5% and 42.7% of the Hong Kong and Shenzhen samples also consider that the different political systems in two cities are a main barrier. Hong Kong residents tend to emphasize the differences in value systems and political systems as main barriers for integration.

Shenzhen residents in the sample tend to emphasize the differences in eco- nomic systems as the top barrier (47.2%), followed by differences in political systems and value systems. They also think that different historical and cultural backgrounds and different development levels are important barriers for integra- tion. The data in this section reveal the impact of fundamental gaps in the value systems, political and economic systems on Hong Kong–Shenzhen integration. They are likely to affect social and institutional integration.

Conclusion This chapter demonstrated close economic integration between Hong Kong and Shenzhen. Limited progress in the institutional integration took place after 2001. But the integration of cross-border communities has lagged well behind eco- nomic and institutional integrations. Brunet-Jailly’s (2005) main hypothesis of the theory of borderland studies is only partially valid in the Hong Kong–Shenzhen region. To some extent, the institutional integration is necessitated by economic integration and, in turn, aims to facilitate economic integration. But close eco- nomic integration and limited institutional integration have not resulted in close social integration in the case of the Hong Kong–Shenzhen region.

Hong Kong and Shenzhen have many differences that may make it difficult to achieve full integration. Many Hong Kong and Shenzhen residents consider that the different value and political systems in two cities the main barriers of Hong Kong–Shenzhen integration. These profound gaps exist under the politi- cal and cultural context of OCTS and Chinese culture. They affect social and institutional integration. Considering a twin city as a city of strong emotional

168 Cross-boundary integration

and mental “togetherness,” it can be concluded that Hong Kong–Shenzhen has not become a twin city yet (Buursink 1996; Ehlers and Buursink 2000). Hong Kong and Shenzhen, the PRD in general, is often considered an advanced case of cross-border regional integration facilitated by political history, kinship and busi- ness ties (Grundy-Warr et al. 1999: 309). A smoother and deeper integration than other cross-border regions is often expected. This chapter demonstrates that this is not the case, especially in terms of institutional integration and social integration (Sparrow 2001; Aguiar 2012).

The OCTS adopted in Hong Kong and Shenzhen/mainland China, to some extent, is to maintain the social and political differences across the Hong Kong–Shenzhen boundary. So far, social integration toward a cross-border community has not been a main objective of inter-city cooperation. It is noted that the notion of a Hong Kong–Shenzhen Metropolis is not equal to the uto- pian vision of a twin city or a quasi-bi-national city with a common iden- tity as defined by scholars (Ehlers and Buursink 2000; Buursink 1996). There is no agenda to abolish the boundary or to merge two urban governments completely.

Note 1 This chapter is reprinted from Shen, J. 2014. Not quite a twin city: Cross-boundary

integration in Hong Kong and Shenzhen. Habitat International, 42: 138–146, Copyright (2014), with permission from Elsevier.

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