Li sounds alarm bells against Shanghai FTZ

Hong Kong in danger from new upstart.

Li Ka-shing warns that Shanghai's new free-trade zone, its first, will deal a blow to Hong Kong and is prodding the city to face this new challenge head-on.

China envisions the new Shanghai FTZ as an international trade and financial center that will effectively challenge Hong Kong’s dominant position in this sphere. China will allow the unrestricted exchange of its renminbi in the FTZ.

China’s plans for the Shanghai FTZ include supporting the establishment of foreign and joint venture banks and encouraging the entry of privately funded banks and financial institutions.

Li pointed out the FTZ will have a big impact on Hong Kong and that the free convertibility of the renminbi will be favorable in the development of Shanghai.

"If Hong Kong does not catch up, it will lag behind others," said Asia’s richest man.

Asked if Shanghai could rival Hong Kong in the next five to 10 years, Li said he did “. . . not want to predict. But it will be faster than most people expect."