As the world's second-largest economy has shown signs of a V-shaped recovery from the coronavirus outbreak, China's ambition to set up a mega economic zone involving its territory Hong Kong has created a ripple among Beijing watchers.
Some analysts warn that if China realizes the "Guangdong-Hong Kong-Macau Greater Bay Area" project, the advent of such an attractive investment destination may provide a window of opportunity for Beijing to bolster its economic influence in the world.
As the world's most populous nation is expected to maintain growth momentum, many global firms would continue investing in China regardless of its communist ideology, which in turn could further undermine Hong Kong's status as an international financial hub.
The leadership of Chinese President Xi Jinping has been apparently "aiming to achieve growth while strengthening the power of the Communist Party, with economic tensions with the United States escalating," a diplomatic source said.
Beijing will attempt to "integrate Hong Kong into the mainland in both economic and political terms by launching the Greater Bay Area. Hong Kong will become a part of China in a real sense," the source added.
China's economy expanded 4.9 percent from a year earlier in the July-September period, after plunging 6.8 percent in the first quarter in the aftermath of the virus spread and picking up 3.2 percent in the three months from April, official data showed Monday.
"The economy has rebounded and the virus has been under control in China. Xi is eager to push forward the Greater Bay Area project, as other major economies are facing a severe downturn against the backdrop of the pandemic," the source said.
The virus, first detected in the central Chinese city of Wuhan late last year, has hit around 85,000 people in the mainland and killed over 4,600, according to Chinese health authorities. But the increase in new infections peaked in late February.
Hong Kong, the former British colony that returned to Chinese rule in 1997, and neighboring Macau, the former Portuguese colony that did in 1999, have each been governed under the "one country, two systems" arrangement.
The Greater Bay Area plan, including Hong Kong, Macau and nine mainland cities of Guangdong Province, is designed to develop a city cluster framework through coordinating infrastructure and technology innovation of the 11 cities.
The bay area covers 56,000 square kilometers, with a population of nearly 70 million and a combined gross domestic product that tops $1.5 trillion.
Hong Kong was promised it could retain its way of life, rights and freedoms for 50 years following its return, but Beijing has recently stepped up measures to quell pro-democracy activists in the semiautonomous region after a series of massive protests last year.
The territory's economic growth contribution to the mainland has also diminished. Although its economy accounted for one-fourth of China's GDP around two decades ago, it is now only about 3 percent.
Meanwhile, Shenzhen -- one of the cities in Guangdong Province that became China's first special economic zone in 1980 -- has played a significant role in the nation's rapid economic development as a state-of-the-art technology center.
The economy of the former fishing village surged more than 1,500-fold over the past 40 years. The GDP of Shenzhen, where Chinese tech giant Huawei Technologies Co. and IT company Tencent Holdings Ltd. are headquartered, has already exceeded that of Hong Kong.
In his speech earlier this month in Shenzhen near Hong Kong, Xi celebrated the 40th anniversary of the special economic zone's establishment and pledged to promote the Greater Bay Area blueprint, calling the southern city a "key engine" for the project.
Hong Kong has long worked as a fundraising conduit for Chinese enterprises, but Beijing is believed to be replacing the territory with Shenzhen as its biggest source of foreign currency.
Stephen Nagy, a senior associate professor of politics at International Christian University in Tokyo and a visiting fellow with the Japan Institute for International Affairs, said the Greater Bay Area could be a "true rival to Tokyo and New York."
"If this could happen, China may be less dependent on economic ties with the United States and Japan and begin to offer a comparative advantage to firms" wishing to do business in China, he said.
"On Shenzhen replacing Hong Kong, ultimately that is the goal of Beijing," he said, adding if Shenzhen can take on some of Hong Kong's functions, the territory "would gradually lose its importance to Beijing and become just an ordinary Chinese city."
Nagy also said, "The Chinese market remains alluring because of its size and growth, especially in the wake of the COVID-19 induced global recession," referring to the disease caused by the novel coronavirus.
"We are likely to see businesses will shift their global operations away from Hong Kong and keep their China-oriented businesses Hong Kong based to please Beijing and ensure market access," he added.
Victor Teo, a research fellow at the University of Cambridge and the Singapore-based ISEAS-Yusof Ishak Institute, cast doubt on such views, saying, "I do not think Xi has disregarded Hong Kong as a financial hub and investment destination."
"For years, the Shenzhen government has been very keen to develop their financial sector, but many plans have been shelved or deferred because the central government has been worried that this might affect Hong Kong," he said.
The regional expert, however, added, "After the unrest in Hong Kong over the year, the deference and sensitivity of the central government to Hong Kong's aspirations might not rank highly anymore."
"From a policy standpoint, Hong Kong would now have to compete like any other mainland cities for their own developmental success," he said.
In Hong Kong, large-scale demonstrations sparked by a now-withdrawn extradition bill with mainland China morphed into an anti-government movement in 2019, with protesters seeking a probe into police use of force.
Afterward, Beijing in late June enacted a controversial national security law for Hong Kong to crack down on what it views as secession, subversion, terrorism and collusion with foreign forces.