World
Hong Kong should adopt the ‘Hefei model’ in the Northern Metropolis
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The arrival of Yuan Gujie, the new deputy director of Beijing’s liaison office in Hong Kong, has sparked widespread speculation. Her legal background and experience in Guangdong province suggest that her posting carries a clear agenda: to promote deeper integration between Hong Kong and other Greater Bay Area cities.
One thing is clear: if the Northern Metropolis is to accelerate, Hong Kong’s existing legal framework and development model may prove inadequate. A fundamental overhaul is urgently required.
The answer may lie in establishing a special economic zone. This formula has been central to China’s economic success and was the decisive factor behind Shenzhen’s rapid rise. But Hong Kong’s trajectory may diverge from Shenzhen’s.
Shenzhen thrived by liberalising and embracing market forces. Hong Kong’s special economic zone may instead demand a stronger role for the government in shaping industrial strategy and guiding long-term development.
There is no better example of China’s new approach to industrial development than the “Hefei model”. It marks a decisive shift from land-financed, infrastructure-driven growth to state-capital-led industrial cultivation. It is a long-term investment strategy that prioritises strategic hard-tech sectors, tolerates early losses and builds entire ecosystems around anchor enterprises.
This focus on high-risk, high-value technology has transformed Hefei, the capital of Anhui province. Its most iconic success is ChangXin Memory Technologies (CXMT), China’s only domestic dynamic random-access memory (DRAM) producer to reach mass production. Founded in 2016 with substantial backing from Hefei’s state investment platforms, CXMT took on the challenge of entering a global market dominated by Samsung, SK Hynix and Micron.
