For a place like Xingang, where there are few people and land resources are scarce, it is an inevitable step to move the low-end labor-intensive industries and move to the hinterland, where labor costs are lower. The problem with Xingang is that while the manufacturing industry is outflowing, it has not been able to carry out corresponding industrial upgrading and develop high-tech industries.

The development of Xingang has always been closely related to the mainland, the early Xingang has always been a free port based on entrepot trade, the establishment of Xinhua, after the outbreak of the Korean War, the United States led by the country imposed a trade embargo on China, Xingang relied on the entrepot trade can not continue, forced to embark on the road of industrial development. Relying on the advantages of the free port, as well as the technology of Europe and the United States, Xingang developed export processing, and the development of the manufacturing industry was very smooth, and by the seventies, the proportion of manufacturing in the GDP reached 30%, which was the highest in history.

At the end of the 70s, with the implementation of reform and opening up in the mainland, Xingang's labor-intensive manufacturing industry began to move to the mainland, forming a cooperation model between the front store and the back factory, making full use of the comparative advantages of the two places. In particular, with the rapid development of international finance, international trade and shipping industries, Xingang has also changed from a free trade port dominated by the export of local products to a free port dominated by the service economy. The share of manufacturing in GDP has been declining, now only about 6 per cent, and the share of employment is less than 10 per cent.

When the Asian financial crisis broke out in '97, although the value of the new Hong Kong dollar did not depreciate significantly with the support of the Pingjing government, the property market and stock market in Xingang were still affected. The property market has plummeted, the economy has declined, unemployment has continued to rise, and the fiscal situation has deteriorated...... In contrast, Taihu, South Korea and Xincheng, which have also suffered from the financial turmoil, have all entered a recovery trajectory this year, while Xingang is still struggling with the quagmire of economic recession.

The reason for this is also that Xingang's economy is overly dependent on trade and financial services, while Taihu, South Korea and Xincheng all have their own industries, and Xingang has always pursued a liberal economic policy, and the government has basically not effectively intervened in the economy.

The laissez-faire economic model of Newport is very rare, which stems from the fact that Newport was a concession of the British before, and it is certain that it will return in 97, and it is impossible for the British to carry out long-term planning for the development of Newport, and the British practice will even deliberately leave some contradictions.

The pillar industries of Xingang are real estate, entrepot logistics and high-end service industries, without a solid industrial foundation, real estate is a source of water, and entrepot logistics is facing the competition of coastal ports in the mainland, has gradually bid farewell to rapid growth, and the employment threshold of high-end service industries such as finance is very high, the accommodation of employment is low, and the number of people who can really be employed in the high-end service industry is limited. Moreover, Xingang's high-end service industry is also increasingly marginalized, and Xingang's status as a financial center is constantly being challenged.

After the return of Xingang, in the face of Xingang's economic development, all walks of life in Xingang are generally aware of the structural problems in Xingang's economy, and it is necessary to adjust the industrial structure that is too dependent on the service industry and promote the diversified development of the economy. Xingang put forward the development of information technology, Chinese medicine port, cyberport, local economy, dual economy and re-industrialization, the Xingang SAR government also set up the Innovation and Technology Commission, to strengthen the overall management of Xingang's science and technology infrastructure, and support for enterprise innovation and technology, but in general, Xingang's economic transformation and industrial restructuring has not been successful, the proportion of manufacturing industry is still declining, the development of innovation technology and information technology is also very slow, and the pattern of relying too much on a small number of service industries such as finance and real estate has not changed much.

In Bao Feiyang's view, Xingang's high housing prices, high wages and labor shortages have led to an outflow of its manufacturing industry to the adjacent low-cost Pearl River Delta region, which is inevitable.

In the early days, Xingang established a division of labor and cooperation with the Pearl River Delta region, the Pearl River Delta carried out production and processing, and Xingang was responsible for R&D, design, and export trade, and the vigorous development of Xingang's entrepot trade led to the development of shipping, aviation, warehousing, terminals, communications, insurance, finance, real estate, law, accounting, and tourism and other service industries. At the same time, Xingang Company, which has set up a factory in the Pearl River Delta region, has greatly expanded its business scale, which has also generated a huge demand for Xingang's related production and service industries, which has further promoted the rapid development of the service industry.

However, with the development of the mainland economy, the mainland cannot only do low-end processing and manufacturing forever, and the mainland industry is constantly upgrading, and accordingly, the advantages of Xingang are becoming less and less. The cost of the mainland is much lower than that of Xingang, although Xingang is still stronger than the mainland in terms of high-end service industry and international standards, but this advantage will be less and less, if Xingang does not change, Xingang's status will become more and more embarrassing, and completely hollowed out, and then surpassed by mainland cities, marginalized.

In fact, this problem is not only encountered by Xingang, when such a large economy as China develops rapidly, the whole world will be affected. Not only will Xingang's manufacturing industry outflow, but the manufacturing industries of the United States, Japan, and Europe are all outflowing, and these countries will inevitably face the impact of their own manufacturing outflow. Japan's economy has not grown for many years, and Europe's economy is also in recession, and the reason why the United States has been able to maintain relatively rapid growth in recent years is entirely because of the strong foundation of the United States and the explosion of a new economy.

And even Europe and Japan, their industrial base is also very strong, the technical force is also strong, when they lose the low-end manufacturing industry, still in the field of heavy chemical industry with higher technical requirements, in the field of electronic manufacturing, in the high-tech industry has the right to speak, and the continuous industrial upgrading, although they bid farewell to the growth of scale, the quality of the economy has not declined significantly.

Although they have invested heavily in manufacturing in the mainland, there are not many manufacturing industries in which Xingang has invested in advanced technology. At this point, Xingang is not even comparable to Taihu, which is very strong in the field of electronic manufacturing, not only has Foxconn, Semiconductor Manufacturing Co., Ltd., UMC, Inventec such foundry giants, but also has VIA, NVIDIA, Asus and other electronic giants, in contrast, Xingang has almost no such manufacturing giants.

Xingang's industrial base is actually very weak, and there is almost no foundation and advantages in new technologies, Xingang wants to develop high-tech industries and innovative industries, this road is right, but it is still a little powerless, especially when Xingang's land prices and housing prices soar, which virtually makes Xingang's business costs continue to rise, resulting in a further decline in Xingang's competitiveness.

In Bao Feiyang's view, the development of Xingang must rely on the mainland, which was the case in the past, is the case now, and will be the same in the future.

In order to solve the problem of development, Xingang must first solve its own positioning, whether it is an urban economy or a relatively independent economy. If positioned as an urban economy, then Xingang does not need to consider the diversified development of industries, there are some cities in the world that are prosperous with a single financial and service industry, such as London, New York and other cities, Xingang only needs to continue to strengthen economic ties with the mainland, constantly remove obstacles with the mainland, integrate into the economic division of labor in the mainland, and continue to expand its advantages in the service industry to the mainland, relying on the rapid growth of the mainland's economy, Xingang can achieve sustainable development and growth.

And if it is positioned as an independent economy, Xingang must change this industrial pattern that relies too much on the service industry. From an international point of view, the world's most competitive small and medium-sized economies, such as Xincheng, Taihu, Finland, Switzerland and other countries and regions, their industrial structure is roughly maintained at 35% of the industry and 65% of the service industry, and master the leading technology in a certain industrial field, with a number of traditional high value-added brands, at present, Xingang does not have such conditions.

As an independent economy, Xingang can actually become a template for Xingang's reference, these two places have too many similarities, Xingang has a land area of 1,100 square kilometers, and Xincheng's land area is only 719 square kilometers, but Xingang has a part of mountainous land, so the land resources of both sides are about the same. The new town has a population of 5 million, while the population of the new port reaches 6 million......

Although Xincheng has the advantage of the Strait of Malacca, in a sense, Xingang, which has the support of the mainland, has many conditions that are actually greater than Xincheng, and Xingang has been the world's largest container port in recent years, overpowering Xincheng, which can be seen from this point where Xingang's advantages lie.

However, Xingang is far inferior to Xincheng in terms of industrial diversification and industrial structure adjustment, and the fundamental reason is that Xincheng has a strong government, and the state-owned economy of Xincheng is very developed, and the Xincheng government will formulate a long-term development plan for its own development, and then use the power of the government to intervene to make the country's development always move in the right direction.

In contrast, Xingang practiced laissez-faire in the past, and the government only implemented simple management of economic development, without planning, guidance, and strong intervention, which led to the lack of a solid local industrial base in Xingang. After the return of Xingang, Xingang implemented one country, two systems, and the Xingang SAR government intervened in the economy, but it still focused on guidance, unlike Xincheng, which could carry out strong intervention, and the effect was very different.

It is foreseeable that if Xingang does not have strong intervention, then the development of Xingang will still be like another time and space, although it is not a recession, but compared with the rapid development of the mainland, the dazzling halo of Xingang will gradually dim, and the gap with Xincheng will become bigger and bigger.