Just as the Chinese saying goes - the wisdom of the masses exceeds that of the wisest individual, Guangdong, Hong Kong and Macao, three of China's most economically active regions, are putting their heads together in an effort to reinvigorate their vibrant economies.

The three southern areas are all in the throes of transforming their original growth models.

Guangdong province was where the first Special Economic Zone was established (in Shenzhen) in the 1978 reform and since then and the province as a whole has enjoyed a higher-than-average national economic growth rate. But it is gradually losing its glitter as the Chinese manufacturing hub has slowed down as factories squeezed for space and budgets relocate elsewhere.

Hong Kong, a free port, tourist center and leading transportation and financial hub is expecting an economic slowdown caused by port facility competition, the mainland stock boom as well by the ripple of the United States sub-prime mortgage crisis.

And Macao, another free port and Asia's third largest economy by GDP (gross domestic product) per capita, is contemplating shifting its bet from its current status as a opulent casino capital to new, less glitzy growth models.

The three areas have been economically linked especially since the Closer Economic Partnership Arrangements (CEPA) was launched in June and October of 2003.

But that is far from enough. A study led by the Guandong provincial government and local academic institutions on furthering economic cooperation between the three powerhouses is expected to be released in May.

The study is the largest of its kind by Guangdong and its result and proposals will be submitted to the State Council for approval.

The proposal will center on setting up a cooperative area among the three, similar to a free trade zone, to promote the exchange of staffs, logistics and funds.

Wang Yang, Party secretary of Guangdong province, is the project team leader. He has set an ambitious goal of building the new zone into an economic area resembling New York's Metropolitan circle.

Yang Daokuang, deputy director of the Social, Economic and Public Policy Research Center under Macao Polytechnic Institute says the concept has a lot of untapped potential.

"It is incomparable in China, covering an economy worth 4.8 trillion yuan and with a world's leading manufacturing center, Guangdong, a world's leading financial center, Hong Kong and a world gambling center, Macao," Yang explains.

Transformation moans

The idea of an industrial upgrade and growth model transformation in Guangdong was floated some years ago, but it emerged in the spotlight last year when Wang was transferred to Guangdong from his position as Party secretary of Chongqing municipality last November.

Wang emphasized that the export-driven province needs to find a new growth engine due to rising costs and the steady appreciation of the yuan.

Wang advocates a strengthened economic relationship for Guangdong with Hong Kong and Macao, instead of the long-advocated Pan-Pearl River Delta Region Economic Cooperation. He believes Guangdong could enhance its competitiveness by learning from Hong Kong and Macau in the areas of service, hi-tech and value-added manufacturing.

Early this year, Wang hosted and met teams led by Hong Kong Chief Executive Donald Tsang Yam-kuen, and Macau Chief Executive Edmund Ho Hou-Wah, to discuss the issue.

For the two special administrative regions, time is pressing to instill something new to the economies.

Since China resumed exercise of sovereignty over Hong Kong and Macao in July of 1997 and 1999, both regions have seen economic growth.

Hong Kong's economy kept rising at a level higher than expected for four consecutive years ending in 2007. Its service sector includes finance, transportation and tourism makes up 80 percent of the economy.

But its position as the world's third largest financial hub has been threatened in the past three years as the mainland stock market grows and more Chinese companies favor Shanghai and Shenzhen listings over Hong Kong. And the expanding handling capacity of Shanghai's Yangshan port and Shenzhen's Yantian port has also been squeezing profits from Hong Kong's port.

This January, the Bank of East Asia lowered down its expectation for the 2008 growth rate of Hong Kong economy to 6 percent, from that of 7.2 percent in 2007.

For Hong Kong, which has scarce natural resources and whose economic rise relies heavily on the mainland, still-closer relations with the mainland could be the best way out, many experts believe.

In Macao gambling is the pillar industry of the resource-scarce region, which annually generates 30 to 35 percent of revenues from huge casinos. The three other prime industries are manufacturing, financial services and real estate.

But due to concerns that the gambling business will soon peak, the local government has been seeking a new industry.

"Macao could sustain growth by investing more on the mainland, and it could also help Guangdong export more overseas," Yang Yunzhong, president of University of Macao (UMAC) and director of Macao Research Center with UMAC, was quoted by China Business Journal as saying.

Blueprint coming along

Discussions on what the cooperative model would look like have been heated in recent months.

Chen Guanghan, a professor from the Research Center on Hong Kong, Macao and the Pearl-River Delta Region of Sun Yat-sen University and also a member of the investigation team, says the first step would probably be launching a trial zone.

The idea is reasonable as the political systems, economies, cultures and law in the three regions are so different and quick large-scale cooperation would prove difficult.

But where to locate the trial zone? Officials from Guangdong government are pushing for Hengqin Island, in the southern part of Zhuhai city in Guangdong and near Hong Kong and Macao.

The island got approval from the Guangdong government in 2006 for development and construction guidelines but is still waiting for a nod from the central government.

But Yang Ruwan, director of Hong Kong Asia-Pacific Research Institution, suggests putting the trial area in the 1-million-sq-m Hetao area, south of the Shenzhen River, which divides Shenzhen and Hong Kong.

Wherever it's located, a special financial district is needed for to trade stocks, securities and futures and promote the flow of funds, says Song Hai, deputy governor of the Guangdong province.

One idea has been a bridge connecting Guangdong, Hong Kong and Macau. It was first proposed twenty years ago but suspended until it was revived in early 2006. The three areas have agreed to respectively invest a share of 35, 50 and 15 percent in the project.