Guangzhou, the capital of Guangdong province, and Hong Kong will begin cooperating in a deeper manner as both places undergo an economic transformation, participants at a forum said on Wednesday.

As global competition becomes ever more intense, cities that are near each other are often entering into the fray bound together as clusters, said Ni Pengfei, director of the Urban Competitiveness Research Center of the Chinese Academy of Social Sciences. Ni said 50 percent of industries are concentrated in the world's 40 largest metropolitan areas, where 70 percent of all technological innovation also takes place.

For those reasons, it is imperative that the Guangdong-Hong Kong cluster and other Chinese city clusters cooperate in a deeper manner, Ni said.

In China's 12th Five-Year Plan (2011-15), Guangzhou's coastal Nansha district was designated as being a business service center for the mainland, a step that linked it to Hong Kong and Macao special administrative regions. The district will also serve as a center for technological innovation, an educational and training base, and an area for cooperation in services related to portside industries.

The State Council is looking over a development plan for the Nansha New Area that was drafted by the provincial and city governments.

Ni suggested that Nansha and Hong Kong cooperate on a range of undertakings, including urban management, in which Hong Kong is more advanced.

Nansha could also become a place where Hong Kong's financial and technological strengths are combined to result in innovative industries, he said.

The city's expertise in finance, education, and research and development will help Nansha as it tries to develop high-tech industries. So will various policy incentives and Nansha's own vast supply of land, said Frank Song, a professor with the University of Hong Kong's school of economics and finance.

Hong Kong had wanted to develop its high-tech industry but failed to achieve that goal because it lacked an industrial foundation and because more than 90 percent of its economy relies on the service sector, Song said.

The infrastructure to link Nansha district to other parts of the Pearl River Delta is already in place, and Nansha is home to a State-level economic development zone, useful coastlines and a clean environment, said Fok Chun-wan, vice-chairman of the All-China Federation of Industry and Commerce and governor of the Fok Ying Tung Foundation.

The international financial crisis has forced Guangdong to transform its economy, a change that gives it the opportunity to cooperate more deeply with Hong Kong, said Yu Yunzhou, deputy director of the Guangdong Reform and Development Commission.

Guangdong authorities will work to ensure Nansha acts as a test of the Closer Economic Partnership Arrangement, a free trade pact between the mainland and the Hong Kong and Macao special administrative regions, Yu said.

They will also push for stronger connections among those places' legal systems, management systems and marketing rules, he said.

By cooperating with Nansha, Hong Kong is securing an opportunity to transform itself and to provide jobs and good living conditions to people in both places, said Zeng Jinze, deputy director of the Guangzhou reform and development commission.

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