The economic opportunities created by Hong Kong's deepening integration with mainland China come with costs. A study by McKinsey and the Better Hong Kong Foundation finds that more than 100,000 jobs in the territory's trade sector face relocation to the mainland within five years. Trading activities account for 450,000 jobs in Hong Kong, as well as one-fifth of its GDP, and have long been vital to Hong Kong's success as a broker between China and the world. But the development of China's Pearl River Delta1 has inspired shippers to bypass Hong Kong and move closer to manufacturers on the mainland. As direct exports from China increase, trading companies will have even less reason to locate jobs in production management, quality control, and logistics in Hong Kong. In fact, many such companies already conduct these activities on the mainland.2 Even more worrisome, workers whose skills don't suit knowledge-based fields such as accounting and finance—where Hong Kong's growth prospects lie—hold 60 percent of the positions at risk. Moves to ease customs delays and cut cross-border trucking costs will help slow the trading sector's decline. However, Hong Kong must improve its job-placement programs, as efforts to develop knowledge-based industries will take...