By Zhao Xu (China Daily)
Updated: 2008-03-06 10:20

Hong Kong businesses need to reposition themselves and be more adaptive to a changing environment if they want to play a larger role in the country's economic and social development, Gao Siren, director of the liaison office of the Central People's Government to the special administrative region (SAR), said yesterday.

Gao was addressing members of the Hong Kong delegation to the first session of the 11th NPC at a group discussion.

His remark came amid media reports that the new Labor Contract Law has raised the costs of Hong Kong businesses on the mainland.

The law, which came into effect on Jan 1, makes it compulsory for companies to sign open-ended contracts with workers with more than two years' service and provide insurance and overtime pay.

Gao assured the deputies - most of them leaders in Hong Kong business - that the policies adopted by the central government and highlighted in Premier Wen Jiabao's speech at the opening of the session yesterday meant there would be more opportunities for cooperation between Hong Kong and the mainland.

With improving the general welfare of the people the focus of the authorities, many spheres that were not the traditional domain of Hong Kong businesses are opening up, Gao said.

These opportunities include the education, healthcare, housing and environmental sectors, he said.

"As a highly developed metropolis, Hong Kong has the human resources and the expertise in those areas," Gao said.

"By providing their services, Hong Kong businesses can not only reap considerable benefits for themselves, but also make a great contribution to the development of our society."

In order to make the most of these changes, Hong Kong businesses need to restructure and to further develop a value-added service industry that expands beyond the category of law and finance, he said.

Gao's words are believed to have struck a chord among NPC deputies and CPPCC members of the Hong Kong delegation who are involved in environmental protection projects on the mainland.

"The continued growth of the Chinese economy will provide a lot of steam for the Hong Kong business communities," Gao said.

"This has been proven again and again by history, and most recently, by the support Hong Kong has received from the mainland during the United States' subprime crisis," he said.

He said the openness of the Hong Kong economy had led some to predict an early slowdown following the US subprime crisis.

"So far, this has not happened," Gao said.

"In Premier Wen Jiabao's report to the NPC, an economic growth of 8 percent is expected for 2008.

The actual number might be even higher. Either way, it will give a strong boost to Hong Kong economy," he said.

Gao said the central government has always had the interests of the SAR in mind.

"Hong Kong has been designated the venue for equestrian events during the 2008 Olympics and Paralympics.

"This is a great opportunity for the city to further raise its international profile and to expedite its development," he said.

"We have all witnessed what the Olympic and Paralympic Games can do for a city. And that's what's going to happen to Hong Kong."