The possible implications are alarming.
Hong Kong has long been proud of it status as a leading financial centre. Its links to the mainland further increase the attractiveness of its financial market to both Chinese and foreign enterprises.
But the city is losing its edge. The recent merger of other leading world stock exchanges will bring even fiercer competition to attract listings from large enterprises. The continuing trend towards globalisation will further expose the HKEx's limitations.
Some people have suggested that the HKEx should merge with the Shanghai Stock Exchange (SSE) to regain the leading role in Asia. But there are structural differences between HKEx and SSE, and the trading currencies are not synchronised.
Our role as a leading global financial centre is fading. Our edge over our competitors in many areas no longer exists. How can we avoid being marginalized?
The first step is to face the inconvenient truth and change our attitude. We must understand that Hong Kong can no longer be the only major player in Asia. The only advantage we hold now is the mainland market. The city's underlying social problems, such as the lack of social mobility, have hindered further innovation. We must accept and even fight for more chances to work together with nearby mainland cities.
As well as relying on assistance or seeking opportunities externally, the fundamental solution would be to develop self-sustaining industries. The city's financial centre status is being challenged, and the future of another important sector, tourism, is not bright either.
External factors are affecting us greatly, but the government lacks a long-term plan. It focuses on resolving current problems rather than long-term planning.
The failure of Cyberport to transform the city into a leading technological innovation base and the recent tourism scandals show we can no longer rely on our diminishing advantages. The fierce competition faced by the HKEx is an early omen of the tough times ahead.
Hong Kong needs a unique and clear direction to survive amid globalisation and the rise of the mainland.