Part of the Belt & Road initiative, the Guangdong-Hong Kong-Macau Greater Bay Area was signed between the National Development and Reform Commission (NDRC) and the governments of Guangdong, Hong Kong and Macau in July 2017 with Chairman Xi Jinping’s presence. This ambitious plan aims to transform the Pearl River Delta (PRD) including Hong Kong and Macau to a dynamic hub of innovation and services with a GDP of US$4.62 trillion by 2030, which will overtake rival bay areas in Tokyo, New York, and San Francisco to become the biggest in the world in terms of GDP.
Where is the Area exactly?
It includes Hong Kong, Macau and 9 cities of Guangdong: Shenzhen, Guangzhou, Dongguan, Huizhou, Zhaoqing, Foshan, Zhongshan, Zhuhai and Jiangmen, all located around the PRD region.
Since the “Reform and Opening-up” policy taking effect in 1978, Guangdong has led the country’s economic development of modern day, earning the name of “The Factory of the World” and taking up 12 percent of China’s economy last year with RMB 9.35 trillion (US$1.38 trillion) of GDP.
However, as the region is facing increasing competition from countries such as India and Vietnam for low-cost manufacturing, the PRD must develop its advantages in openness and innovation to continue to take a leading role in China’s next stage of economic development.
This landmark initiative aims to bring together the key cities of the Delta region to build a new powerhouse–one that is comparable to other city clusters such as Greater Tokyo Area, San Francisco Bay Area and Greater New York.
One of the GBA’s key objectives is to improve the level of cooperation within the region. This includes identifying the core competitive advantages of the cities within GBA and exploring ways for them to complement one another. One example of this is to build on the strengths of Hong Kong’s financial and professional services sectors, Shenzhen’s high-tech manufacturing and innovation skills, and the manufacturing strengths of Dongguan and Guangzhou.
The development of the area should also act as a catalyst for China’s Belt and Road initiative–an ambitious strategy that aims to link the economies along the Silk Road Economic Belt (Central Asia to Europe) and the Maritime Silk Road (South Asia to Africa and the Middle East) together.
It’s on the move
As cities in the GBA fall under different customs zones as well as legal and administrative systems, the most pressing issue for local governments is to collaborate on a broad range of topics including economic policies, environmental and transport issues, and regulatory harmonization. The alignment of infrastructure development is already on the way.
There are three key infrastructure projects. Firstly, there is the Hong Kong-Zhuhai-Macau Bridge, which will likely open in 2018 and significantly reduce travel times from Hong Kong to Zhuhai and Macau. Secondly, there is the Express Rail Link, which is due to open in 2018 and will connect Hong Kong to Shenzhen and Guangdong, and subsequently to China’s vast high-speed rail network. Finally, there is the Shenzhen-Zhongshan Corridor, which is an eight-lane highway that will reduce travel time between Shenzhen and Zhongshan/Jiangmen by approximately 30 minutes after its completion in 2024.
Another project in the pipeline is the Guangdong free-trade zone, which was launched in 2015 across 60 square kilometers of the Nansha New Area in Guangzhou, 28 square kilometers of the Qianhai and Shekou areas in Shenzhen and 28 square kilometers of Hengqin in Zhuhai. It will make the region more open to international investment in the targeted industries.
This was followed by the proposed development of the Lok Ma Chau Loop when Hong Kong and Shenzhen signed an agreement in January 2017 to transform a stretch of land on the border between the two cities into an innovation and technology park.
According to a survey done by KPGM China, Hong Kong General Chamber of Commerce and YouGov, the top three challenges facing the development of the GBA are protectionism (ranked as first, second or third by 60 percent of respondents) and silos between and within governments (53 percent).
If the GBA is to live up to its potential, it will be important to overcome such challenges. Concerns as to whether this is possible or not were reflected in the third-ranked challenge–an over-dependence on government’s foresight and planning capabilities (ranked as first, second or third by 47 percent of respondents.