Good for business: Director of the new Hong Kong Economic & Trade Office in Guangdong, Peter Leung says Hong Kong and Guangdong must work better together as a team to become a regional powerhouse.

Hong Kong and Guangdong could become one of the world's most competitive business regions in 20 years if they work better together as a team.

Peter Leung, Director of the new Hong Kong Economic & Trade Office in Guangdong, said Hong Kong's financial smarts paired with the province's industrial might gave the pairing a distinct international advantage.

"Through closer contacts with officials in Guangdong and the municipal authorities, and through closer liaison with Hong Kong business people in Guangdong, we want to build closer links so we can enhance the trading and economic activities between the two places," Mr Leung said.

Guangdong is now regarded as the factory of the world and is also developing service and trading activities, he noted. Hong Kong is Asia's world city as well as a centre for finance, trade and communications.

"There are a lot of complementary strengths between Hong Kong and Guangdong. If we can work more closely together on economic and trading activities I think we can develop one of the strongest and most competitive regions in the world over the next two decades."

The Guangzhou office was officially opened on October 14. A temporary office was commissioned six months earlier and a permanent office found in July in Guangzhou's new commercial district. The office has eight staff from Hong Kong plus nine locals who are mostly high quality support staff.

Mr Leung said that to meet their true potential, two serious gaps between Hong Kong and Guangdong needed closing.

Despite good business and profits over the last decade, many Mainland enterprises did not know what they needed in their next stage of development. They lacked knowledge of Hong Kong's strengths and did not know how the city could help them enter the world market with better management, financial knowledge and a world market perspective.

The second was Hong Kong entrepreneurs not knowing what Mainland firms needed at their current stage of development.

"Many of our enterprises have told me 'we have this service, or this product' but very few can tell me the current situation of the enterprises in Guangdong and what they would be needing to further develop. Hong Kong businesses know what they possess but don't necessarily know what their clients might need. There's a big gap in the knowledge of our business people in knowing the demands of their counterparts in Guangdong," Mr Leung said.

"I think these two gaps highlight why there is such great potential for our future economic co-operation with Guangdong. So I hope that in the next one to two years I can try to close these. Either one will not make the market work �V you must make supply and demand meet in order to create a situation where you can have a deal."

With hundreds of thousands of enterprises the market potential was huge. In Guangdong over 50% of the economic activities were now undertaken by private business unlike the northern provinces where about 20% was undertaken by private businesses.

To reach these companies, Mr Leung said seminars and publicity activities would be organised to promote the Office and the services it can provide.

"Our office is now a focal point. A lot of the business people I have spoken to in Guangdong really welcome our presence because they now know there is a focus to what we're doing and a central contact point. So long as we have achieved a critical mass of understanding hopefully they will then start coming to us," Mr Leung said.

"Guangdong and Hong Kong have been very close throughout history but surprisingly, because of the world market, globalisation and new commercial concepts, such things as commercial activities, trading concepts and marketing concepts are things that have divided our understanding so much, just like a curtain. So we want to open that curtain. This must be removed before we can develop the Pearl River Delta as a whole."