In June this year, I joined representatives of the Hong Kong, Macau and Guangdong British Chambers of Commerce, and other British trade, industry and business associations when they met to discuss the Greater Bay Area Initiative. It was agreed to form an inter-organization working group to collaborate across several areas to promote the opportunities offered by this central government mega project.
The consensus was that the value of such a working group is the sharing of insights and intelligence on developments in the GBA, to advance a deeper understanding of the prospects that the GBA presents for member companies and the business community at large.
With a particular focus on business facilitation and tackling barriers to business, the group will work together to develop GBA-relevant policy recommendations for local administrations and regulators across the region, as well as working with the British government to help member companies access business opportunities in the area.
So what exactly is this “GBA Initiative” that seems to be on everyone’s lips these days? How many of us really understand the significance of its economic potential and how China’s plans for the area are set to impact those of us living here in the decades ahead?
Urbanisation and the creation of wealth have been signatures of mainland China’s journey of economic reform and liberalisation. Today’s China is home to the world’s greatest number of city dwellers. To foster new business opportunities, China has a grand strategy of developing multiple city clusters to create sizeable areas of economic strength.
One of the most notable of the mainland’s urbanisation initiatives is the southern China Guangdong-Hong Kong-Macau Greater Bay Area, which covers the country’s most open and economically vibrant region. Nine cities in Guangdong province, together with the Special Administrative Regions of Hong Kong and Macau, have a population of 70 million, which makes up five per cent of the total population in China. The goal is to develop a world-class urban cluster that could rival global cities also situated on bays, such as San Francisco, New York or Tokyo.
With a population greater than the whole of the UK and twice the size of Canada, the GBA occupies less than one per cent of China’s land area, but contributes 12 per cent of GDP. In 2017, it added US$1.5 trillion (HK$11.8 trillion) to the Chinese economy. Three of the world’s top 10 container ports are in the GBA (Shenzhen, Guangzhou and Hong Kong) and air freight traffic across the GBA is greater than the combined figures of the bay areas of San Francisco, New York and Tokyo.
As part of the GBA master plan, different cities will play different roles. Shenzhen’s share of R&D investment is matched only by that of South Korea and Israel. As a hi-tech hub in southern China, Shenzhen is currently home to more than three million businesses, including tech giants such as Tencent, DJI and Huawei. According to the GBA Outline Development Plan, Shenzhen should continue its leading role as a capital of innovation and creativity.
Hong Kong is set to become a green bond hub for mainland issuers and global investors; in 2018, green bonds valued at more than US$11 billion were arranged and issued in Hong Kong – about triple 2017’s figure.
There is to be more cooperation in medical and health care services between Hong Kong and the mainland. Over four million patients have been treated in the five years between 2012 and 2017, in a hospital in Shenzhen operating under Hong Kong’s management system.
Macau, with its highest GDP per capita in the world, is billed as “the world’s entertainment hub”, and, under GBA guidelines, is to partner with Zhuhai to boost tourism. With 34 million visitors last year to Macau, tourism is already vibrant, but with the opening of the Hong Kong-Zhuhai-Macau Bridge, visitor arrivals in Macau increased to 3.4 million tourists in January, a 25-percent increase in year-on-year terms. Visitor numbers are expected to increase further through forming partnerships with Portuguese-speaking countries.
Macau is also expected to have special access to land on Hengqin Island in Zhuhai to develop world-class tourism and leisure facilities. The GBA master plan says Hengqin will create a favourable environment for hosting international events to attract tourists.
Hong Kong businesses have also invested in the creation of an integrated tourism and entertainment development in Hengqin. Two Hong Kong-listed companies have invested more than US$750 million in Novotown, a development that features indoor theme parks, performance halls, hotels and wedding venues.
The newly-formed British chamber and associations’ working group is optimistic and enthusiastic about projecting the GBA offer to UK companies and likewise the UK offer to Chinese companies. Collaboration is planned on co-hosting and organising events, sourcing and inviting speakers and cross marketing relevant networking events to members. Visits will be arranged for members to cities/localities within the GBA, and providing support in arranging member round tables and missions.
The importance of the Greater Bay Area to business near and far is not to be underestimated; the impact of this mega-project will be felt here for generations to come.
