Both the national Chinese Academy of Sciences and the International Institute for Management Development (IMD) warned recently that Hong Kong is fast losing its competitive edge against fast-emerging mainland cities. Hong Kong is also becoming less and less superior compared with other countries and regions, with the United States and Switzerland having surpassed the HKSAR on various fronts, forcing the city to third place after two consecutive years of leading the pack.

The stark warnings from the two authoritative organizations have raised the alarm for Hong Kong. The IMD's World Competitiveness Rankings report delved into what are seen as some of the key factors for Hong Kong's poor showing - slipping back in the categories of economic performance, government efficiency, business efficiency and infrastructure.

A basket of factors can be attributed to the weakening of Hong Kong's competitiveness. Among them, I believe the most fatal one is "internal friction". The increasingly serious politicization has been a drag on almost every policy-making process, disabling the normal functions of the government. The most evident is the filibustering in the Legislative Council (LegCo), which saw a total of five filibustering cases within a year, with each one becoming more ridiculous. In the last and the most serious case, more than 700 LegCo committee stage amendments were proposed by individual members during the scrutiny of the Appropriation Bill 2013; while the government had used various means and channels to explain to all lawmakers and the general public the necessity of passing the bill by mid-May and the consequences of delaying it. Imagine how much work, time and money had gone down the drain during this period!

Apart from "internal friction", another vital reason is that Hong Kong people have become more and more dependent on the government and are losing the "Hong Kong Spirit" of exerting oneself with diligence and flexibility.

That Hong Kong has turned into an international metropolis and one of the world's three top financial centers from a small fishing village relies on generations of hard work. Hong Kong has suffered from devastating economic crises, but the older generation advanced against hardship with flexibility and enterprising spirit - it is that spirit which has made Hong Kong what it is today.

As for now, however, people don't settle issues by themselves but would seek help from the government at every available opportunity and at all costs. In recent years, people have only focused mainly on how money allocated in the budget is to be used instead of other important measures. They always complain about how little the government is giving out. If everyone in this society only cares about receiving instead of contributing, our resources would shrink in no time.

The IMD report suggests that Hong Kong should strengthen its relationship with the mainland to help the city face future challenges. Since the mainland's opening-up and the implementation of bold economic reforms, Hong Kong has been playing a positive role in the economic development of both places. We are inextricably linked.

Unfortunately, there are still rampant voices of discontent that tend to intensify misunderstanding between Hong Kong people and mainlanders. If allowed to go unchecked, such an attitude is extremely harmful to the interests of both sides. Hong Kong's social values and characteristics, undeniably, should be protected and respected, but the respect for cultural differences is also important, and Hong Kong people should learn to be more tolerant of others.

Hong Kong is privileged in many aspects, one of the most important being its strategic geographical location - being adjacent to the world's largest market and manufacturing center. The economic integration between the two places is the general trend. How to get rid of the obstacles is an acid test for the HKSAR government.

The author is vice-president of the Chinese Manufacturer' Association of Hong Kong.

(HK Edition 07/05/2013 page9)