China has clearly entered a period of profound mobility. In the 2010 national census, 230 million people were categorized as migrants. Many live in the Pearl River Delta, moving from their rural home lands to work in factories or companies making goods for domestic and international markets. It was this vast army of people that the Central Committee of the Communist Party of China had in their sights when they promised household registration reform during the Third Plenum in November. Migrant laborers in China have been the great foot soldiers of reform, but they are also those who have made the greatest sacrifices. Their need for a more secure future in terms of welfare and access to public goods is politically very pressing. It would not be an exaggeration to say the aspirations of China as it becomes a global economy and world power rest on the backs of its migrant laborers, their children and dependents.

Mobility on the mainland matters to Hong Kong because in many ways it sits in the front line of this vast process. The SAR has a population of just over 7 million. But in 2012, a staggering 30 million came from the mainland on visits of a day or more. Some came in transit; some came to shop and headed back to their homes. A few came to settle. Whatever they did, this is an immense stream of people, and their impact on Hong Kong's culture, physical infrastructure, and economy has been, and will continue to be, huge. From a period of only a decade ago when it was very demanding bureaucratically to get permission to visit Hong Kong with a mainland ID, it is now straightforward. Even more important, a large part of Hong Kong's economic prosperity relies on this flow of high spending by people who are becoming increasingly affluent.

This flow gives Hong Kong and its sister cities on the mainland a point of common interest. Shanghai, with a population three times that of the SAR, has half a million new residents moving in every year. The physical impact of these new arrivals in terms of finding jobs, homes and communities for them is challenging enough. But there were longer-term problems. How do you create social cohesion in a community with this speed of change? How do people set down roots in an environment where almost every day there is rapid transformation and yesterday is like ancient history? How do you build up the fabric of a stable society where everyone is a new comer and there is little settled sense of a common culture?

Hong Kong has answers to some of the questions about sustainability, but there might also be things it can learn from mainland cities. With them, it has common problems about environmental sustainability. Pollution in the city is a rising problem. So is housing. Finding ways of accommodating an increasingly expectant and well-educated work force that avoid unrest and public dissatisfaction is a critical challenge for governments. And while the systems in Hong Kong and mainland cities are different, the root issue is the same. As citizens grow wealthier, they are also growing less content, and more vocal in their dissatisfaction. This is the paradox of development. Money does not, in the end, guarantee happiness. Finding intangible things which do will be a common mission for the Hong Kong and central governments.

Both on the mainland and in Hong Kong, the great issues of education provision and public goods, and dealing with inequality, are going to become key performance indicators on which the governing class is likely to be held accountable. GDP growth alone won't solve these, as is becoming clear on the mainland where the era of double digit growth is over. Hong Kong, as a remarkable book by former head of Hong Kong government's Central Policy Unit Leo Goodstadt makes clear, is facing growing inequality where the wealthy sit side by side with those who are deprived and disenfranchised.

It is likely that dialogue and debate to deal with generic issues that arise from rapid change, and social mobility, will become more pressing in the years ahead. Leaders will need to be open-minded and pragmatic about what new methods might work. Hong Kong has an enviable healthcare system, and its provision of public goods from education to some forms of welfare has been strong. But huge issues about public housing, care for the elderly, and providing tertiary education for increasing numbers of people will arise. Alongside these will be the problems of how to attack inequality in society at a time when this is growing worse almost everywhere. Hong Kong has a lot to teach in these areas, and has so far maintained a relatively balanced, stable social system despite the immense influx of new influences and people. But its identity and social systems are going to face tougher demands in future. It is likely that its greatest asset over this period will not just be to teach but to listen as the world enters a phase of profound technical, political and social transformation.

The author is executive director of China Studies Center and professor of Chinese Politics at University of Sydney; team leader of the Europe China Research and Advice Network (ECRAN) funded by the European Union; and associate fellow at Chatham House, London.

(HK Edition 12/11/2013 page1)