"Competition between the Pearl River Delta and Yangtze River Delta has become more intense," Mr Tung says. "It is important for Hong Kong and other businesses in the Pearl River Delta to better integrate themselves to create a seamless logistics supply chain originating from the manufacturing facilities and ending on the shelves of the customer in the United States, Europe or Asia."

Mr Tung wants governments within the Pearl River Delta to invest in improving physical links in the region: "For Hong Kong, I believe we must upgrade our own physical infrastructure to ensure better connectivity to ensure a more efficient flow of people, goods and services across the border."

But Mr Tung's words are in direct conflict with the expressed view of the Hong Kong authorities, whose official position is to deny that there is competition. Just ten days ago, speaking in Shanghai ahead of the Mainland/HKSAR Conference on Co-ordination of Major Infrastructure Projects, Hong Kong's Chief Secretary for Administration, Donald Tsang suggested that there is little direct competition between the SAR and Shanghai, as a result of their differing economic structures.

'It is natural for competition to exist. But there is little chance for head-on competition as the two sides have plenty of room to complement each other,' he explained.

During a meeting with Shanghai Mayor, Chen Liangyu, Mr Tsang stressed the degree to which Hong Kong values co-operation with the Chinese mainland on large scale infrastructure projects, and announced that the low tax jurisdiction's long-term goal is to stregthen links with the major cities on the mainland in order to facilitate the flow of investment, people, and cargo.

Excluding Hong Kong and Macau, the Pearl River Delta accounts for just 7% of China's gross domestic product with 2.5% of its population. The Yangtze delta accounts for 19% of the mainland's economy and 10% of its population.