Some analysts in Hong Kong expressed optimism over the future of the territory despite worries by some in the local finance sector that the launch of Shanghai Pilot Free-Trade Zone (FTZ) last September would weaken its competitiveness.

They believe that Hong Kong would remain competitive as long as it seizes the opportunities of mainland's comprehensive, deepening reform and enhance its cooperation with China's Pearl River Delta.

However, they admitted that Hong Kong is facing mounting challenges when all major world economies are engaged in structural reforms and other major world financial centers have beefed up efforts to adapt to the changing global economic and financial landscape.

Anita Fung, CEO of HSBC Hong Kong, said that Hong Kong is losing her competitive edge in RMB offshore [Hong Kong Company Formation]business when more countries and regions have started similar businesses.

"If Shanghai became the international financial center in 2020, and by then RMB has become convertible, Hong Kong can no longer enjoy the benefit as the sole RMB offshore center," Fung said.

Chen Ping, professor from Peking University, said Hong Kong should be keenly aware of the fiercer competition between Hong Kong enterprises and their foreign counterparts for the mainland markets. He noted that Britain, Germany, France and many other countries are seeking direct business ties with the mainland rather than via the platforms in Hong Kong.

However, Tse Kwok Leung, head of economics and policy research of Bank of China (Hong Kong) told Xinhua that Hong Kong remains highly competitive compared with others in the Asia-Pacific region.

He noted that Hong Kong's status as a free port, the concept of free trade that pervades legal system, economic and financial policies, government and corporation conduct combined to help enhance liquidity, transparency and efficiency of its financial markets.

This helps make Hong Kong a leading international financial and business center and headquarters of multinational enterprises, he said.

"The free port policy, great business facilities, well- established legal system, simple and reasonable taxation system, clean and efficient government, as well as excellent location and widespread use of both Chinese and English languages have contributed to Hong Kong's world-class business environment," Tse said.

Some analysts said that Hong Kong will enjoy greater room and opportunity for further growth as exchanges between the mainland and Hong Kong is proceeding in a deep-going manner.

Leung Chun-ying, chief executive of Hong Kong Special Administrative Region (HKSAR), said earlier that Hong Kong is the "super agent" of the mainland and the rest of the world, "Hong Kong will continue to get dividends by participating financial reform in mainland."

Tse said he believes that economic liberalization has brought both competition and opportunities for Hong Kong. In response to changes in the international and regional business environment, Hong Kong should actively participate in the mainland comprehensive deepening reform process, and try to play a greater role.

"Past experience shows that each time China's mainland further deepens its reform and opens itself [Offshore Company Incorporation]wider to the outside world, Hong Kong will benefit by opportunities it created for further development," Tse said, noting that Hong Kong should strengthen financial cooperation in the development of FTZ.

Chen also suggested that Hong Kong transform and redefine her position when more free trade areas are opening to foreign direct business and investment.

Liu Xiaochun, head of Agricultural Bank of China (Hong Kong) said there is no need to worry about the rapid growth of other regions in the mainland, as Hong Kong's development has always been closely linked with the mainland.

Some scholars have suggested that the most important thing is to strengthen cooperation between Hong Kong and Guangdong. "For Hong Kong, Guangdong represents a huge market for the city's core financial services," Tse said.

It is estimated that by 2015, the per capita GDP of Guangdong Province will rise to 10,000 U.S. dollars with total GDP up to 1 trillion U.S. dollars.

"Such a huge domestic market will provide great opportunities for the development of the financial services industry in Hong Kong," Tse added.

"Hong Kong and Guangdong should integrate and make good use of the four platforms currently available," Tse said, noting that since Guangdong has set a target, there will be a major breakthrough next year.

The report of Hong Kong Monetary Authority said that hundreds of millions of people in the Pearl River Delta region will bring significant opportunities for Hong Kong and it should invest more on the financial service sector to seize the big chance.