In a series of article, we will present the key characteristics of the developments of the Greater Bay Area. We will highlight the next opportunities for SMEs and for some specific sectors, and the challenges to be expected. This is an introduction to the Development Plan of the Greater Bay Area (GBA).
Rising awareness and importance of the Greater Bay Area project
If you live or work or do business in Hong Kong or in the surroundings cities, the topic of Greater Bay Area “GBA” became very familiar on a daily basis, either during business discussions or simply by walking around and seeing numerous promotional advertisements.
Oversea, the GBA has not yet made the headlines, and is still a matter that is not well known outside specific sectors, although the Belt & Road Initiative has been largely presented. However, for the last 10 years and the next 20 years, the Development plan of the GBA plays an important role into China’s economy development and international businesses.
Hong Kong’s role as a gateway has been enhanced and SMEs have now to integrate the GBA into their mid-term international strategy.
The GBA is a hidden economic giant
The Development Plan of the GBA is a large-scale national program planned to form an integrated economy by connecting economically and socially Hong Kong, Macau and the nine cities in the Pearl River Delta of Guangdong.
This competitive and strategic world-class bay area of 56,000 square kilometers, 86 million inhabitants, and a GDP (Growth Domestic Product) amounting 2 trillion USD represents the 9th biggest economy in the World. Being 11% of the China’s GDP, the GBA is a crucial strategic area in China’s national development.
The GDP of the GBA is projected to reach USD 5.8 trillion by 2040. This would be equivalent to around 2.3% of the world’s GDP. The GBA will have an even larger economic footprint, with its GDP projected to be 5.5% of total the Asia Pacific region GDP by 2040.
What is the development plan of the GBA?
The plan started from a strong base with a modern manufacturing ecosystem in Dongguan, Guangzhou and Foshan, the high-tech advanced manufacturing, IT, technology and innovation strengths of Shenzhen, Macau’s status as a global tourism and leisure center, and Hong Kong’s role as an international finance, transportation and trade center, as well as an asset management and global offshore RMB hub.
With 12 official policies area implementing the free flow of people, goods, capital and information throughout the region, the GBA plan leverages each city’s individual strengths and promotes integration across many fronts: infrastructure, legislation, visas, taxation, work permits, company set-ups and stock exchange connections.
Achieving several central goals simultaneously, these policies oversee the improvement of transport and logistic infrastructure, the growth of international centers of innovation and technology, the development of globally competitive modern industrial and financial systems, the conservation of ecological systems for developing a quality circle for living, working and travelling and creates an equal to the bay areas of San Francisco, New York and Tokyo.
Modern planning and expected developments
China’s 14th five-year plan for 2021-2025 has again included the GBA as part of the national strategy since it was first announced in March 2016. Today, it is a vital topic of discussion and is regarded as a priority by all levels of the Chinese administration and across the business world. The National Development and Reform Commission (NDRC) has created a special fund from the central government budget to directly fund some of the GBA’s most ambitious projects, thus fully integrating it into the Belt & Road Initiatives. The Fund supplements budget allocation at local and regional levels. Several others national, regional and local policies, plans, actions and agreements between all cities of the GBA are set on a steady basis.
Their implementation has supported the economy and set the field for reaching the GBA’s goals creating a lot of synergies Hong Kong can explore with other cities.
Thanks to historical and strategic positioning as a super connector between the Chinese mainland and international markets, Hong Kong plays an important role in the plan and the GBA represents a source of major economic potential for all Hong Kongese actors and across all sectors.
Hong Kong is getting intertwined in the Greater Bay Area
Within the last 10 years, Hong Kong has seen infrastructural changes which have changed its physical connection to the Mainland with the HK-Macao-Zuhai Bridge, Hong Kong-Shenzhen Fast speed train line, and the 3rd airport runway. Several neighboring mainland Free Trade Zones and Special Economic and Technological Development Districts benefited with the establishment of thousands of companies, trading with and through HK and the rest of World on a daily basis. Schemes for financial sectors opened doors for easier exchanges and a harmonization of rules between different systems. Legal changes allowed to overcome practical burdens between civil and common law system and enhanced the safety and the way of doing business.
Although Covid-19 triggered some delay, the level of governmental and business support for the program indicates that it is on a strong and committed path. When fully realized, the Greater Bay Area’s development plan will completely change the face of the region.
You can find the other articles of the Greater Bay Area series below:
- Will be added after articles’ publication