Home > News Center > Research & Teaching > [Global Times] Plans aim to integrate region in terms of tech, finance, manufacturing

[Global Times] Plans aim to integrate region in terms of tech, finance, manufacturing

Last updated :2017-04-20

Source: http://www.globaltimes.cn/content/1042826.shtml
By Ma Jingjing

More than the sum of its parts

In the Government Work Report delivered on March 5, Premier Li Keqiang said the central government will draw up plans for developing the Guangdong-Hong Kong-Macao Greater Bay Area, effectively elevating it to a national project. Hong Kong Special Administration Region (SAR) Chief Executive Leung Chun-ying will visit several cities in the Greater Bay Area from Wednesday to Friday. Experts believe that the area will become home to innovative finance, modern services and advanced manufacturing due to its huge economy, as well as its world-class ports and transportation network. But challenges such as tariffs, weak innovation and insufficient global understanding still need to be overcome.

The Guangdong-Hong Kong-Macao Greater Bay Area is expected to develop into a world-class economic zone known for its innovation, openness and high industry convergence, but experts said greater global understanding and regional cooperation remain needed to achieve that goal.

At the Fifth Session of the 12th National People's Congress of the People's Republic of China on March 5, Chinese Premier Li Keqiang said the central government will draw up plans for the development of a city cluster in the Guangdong-Hong Kong-Macao Greater Bay Area to capitalize on the distinctive strengths of Hong Kong and Macao, elevating their roles in developing and opening up China's economy.

During a meeting with the incoming chief executive of the Hong Kong Special Administrative Region (SAR) Carrie Lam Cheng Yuet-ngor on April 11, Li said the central government will create the plans in 2017, the Xinhua News Agency reported.

Current SAR Chief Executive Leung Chun-ying will lead a delegation to visit several cities in the Greater Bay Area from Wednesday to Friday, according to the SAR government.

Regional strengths

The Greater Bay Area encompasses Hong Kong, Macao and nine cities in South China's Guangdong Province, including Guangzhou (the provincial capital), Shenzhen, Zhuhai and Zhongshan, representing one-fifth of the country's land, one-third of its population and more than one-third of its economic output, according to a Xinhua report in September 2016.

The Greater Bay Area GDP was around $1.3 trillion in 2016, about the same as that of the New York Bay or San Francisco Bay areas, though a little less than that of the Tokyo Bay, said Mao Yanhua, a professor at the Institute of Guangdong, Hong Kong and Macao Development Studies at Sun Yat-sen University.

The area has world-class ports in Hong Kong, Shenzhen and Guangzhou that together handled more than 60 million twenty-feet equivalent units in 2016, the most in the world, Mao told the Global Times on Saturday.

In addition, the transportation network linking the cities in the area has improved significantly in recent years, having laid a solid foundation for regional integration.

The Guangzhou-Shenzhen-Hong Kong express rail link is expected to open to the public in the third quarter of 2018, the Guangzhou-based newspaper Southern Metropolis Daily reported in March.

In addition, Hong Kong-Zhuhai-Macao Bridge will be completed by the end of 2017, according to a report on gov.hk in February.

Given that Hong Kong and Macao have had a greater degree of opening-up under the principle of "one country, two systems," they can help companies in the Pearl River Delta region "go global," Mao said.

Meanwhile, Hong Kong will play a bigger role by serving as platform for mainland companies to raise funds and invest, he said.

With stepped-up efforts made by the Chinese mainland and Hong Kong, the Greater Bay Area will create immense opportunities to develop into an area that is bound to have far greater global influence and impact than areas such as New York Bay or San Francisco Bay areas, according to Alistair Michie, secretary-general of British East Asia Council, also a foreign expert on China.

"Guangdong-Hong Kong-Macao Greater Bay Area can already claim to be a core global area for manufacturing. In this digital age, I believe the area can climb the value-added ladder and become a global leader," Michie told the Global Times on Friday via e-mail.

"China is emerging as a 'game-changer' in the era of digital technologies. This is hugely relevant as the world has entered an information revolution that will have greater impact than the UK industrial revolution [from the 18th to 19th centuries] that was driven by steam power," he explained. "With the Chinese government's focus on boosting its domestic economy, the Greater Bay Area has immense opportunities to use this as a platform to lead across China and the world."

The Greater Bay Area may focus on three areas of development: innovative finance, advanced manufacturing and modern services, as well as infrastructure links, Ren Zeping, chief economist at Beijing-based Founder Securities, said in a research report on Wednesday.

The area may develop into China's innovative finance and technological finance center by taking advantage of Hong Kong's position as a global financial center, Guangdong's strengths in venture capital and private equity, as well as modern manufacturing in the Pearl River Delta region, he said.

Obstacles to integration

Theoretically, there will be great opportunities to further combine Hong Kong's strengths in finance with Shenzhen's advantages in technology and Guangzhou's experience with trade, but more work needs to be done to foster integration, experts said.

Poor cross-border cooperation, weak technological innovation and environmental pollution all pose challenges to the further integration of the Greater Bay Area, Mao said.

"Given that Hong Kong, Macao and Guangdong belong to different customs areas, border control measures like tariffs restrict capital factors from flowing," he explained. "Besides, differences in the three regions' economic and social systems under the principle of 'one country, two systems' also pose challenges to cooperation."

Although ties have strengthened between Hong Kong, Macao and ­Guangdong, many young Hongkongers still don't want to come to the mainland due to its lower stage of development and differences in habits and customs, a 31-year-old civil servant surnamed Peng in Zhongshan told the Global Times on Friday.

Inspired leadership will be needed to create harmony among all the people, Michie said.

"Much more could be done in Hong Kong to create educational opportunities for young people there to motivate and excite them about the tremendous potential going forward," he explained.

"Besides, greater global understanding will help realize the potential of Guangdong-Hong Kong-Macao Greater Bay Area," he said. "For example, in the UK much could be done to awaken the media and mass of people about the realities of the Greater Bay Area. Many in UK still have a myopic view of Hong Kong that is years out of date."