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United KingdomChina’s cabinet recently unveiled guidelines for the development of the Greater Bay Area around the Pearl River Delta to induce faster growth in the region. The plan covers nine cities in Guangzhou province as well as Hong Kong and Macau. The China Greater Bay Area with a population of about 70 million people is considered a driver of China’s future growth. It has a combined gross domestic product of about $1.5 trillion.
The plan sets long-term goals until 2035 to turn the Greater Bay Area into a global innovation centre and financial powerhouse – rivalling with Silicon Valley and the Tokyo Bay Area. Infrastructure projects as well as establishing advanced manufacturing and modern services industries are included in the development plans.
The plans further include to give financial institutions more flexibility: Conducting spot and forward yuan trading and yuan derivatives transactions will be allowed, as well as cross-border yuan lending. Also, companies will be able to issue yuan-denominated bonds within the area.
Connecting the cities of China Greater Bay Area is key
To optimize infrastructure, the Chinese government will expand and upgrade the airports of Hong Kong, Macau, Guangzhou and Shenzhen. Already last year, Chinese President Xi Jinping officially opened a bridge connecting Hong Kong to Macau and the mainland Chinese city of Zhuhai – the world’s longest cross-sea bridge. Traveling from Hong Kong International Airport to Zhuhai now takes about 45 Minutes – compared to several hours before. Earlier in 2018, a high-speed rail connecting Hong Kong to mainland China started its services.
Another mega project is connecting Shenzhen, home of Tencent and Huawei headquarters, with Zhongshan. The project includes the building of artificial islands, an underwater tunnel starting on the Shenzhen side and a bridge. The construction is already ongoing, scheduled to be completed in 2024. The two areas have developed unbalanced in recent decades – Zhongshan lacking behind Shenzhen. Underdeveloped transportation networks are considered the main reason. The new connection is expected to improve the situation.
Known for its manufacturing industry, Guangzhou on mainland China, is set to roll out 42 infrastructure projects among 112 key projects. It’s Nansha District is said to become a ‘core gateway’ for the whole area by 2035.
Hong Kong citizens sceptical regarding plans
Hong Kong is listed as a core city in the Greater Bay Area plans. As an international financial hub, the metropolis is expected to further strengthen its role as an offshore Renminbi business centre.
Chinese Premier Li Keqiang said when presenting the annual government work report in early March that the mainland will support the Hong Kong and Macao Special Administrative Regions. The ‘one country, two systems’ governing principle would be upheld in Hong Kong and Macau and Beijing would fully support the two cities’ leaders and governments. Both should seize the opportunities brought by the plans, Li furthermore said, and should take the opportunity to deepen the cooperation with the mainland.
Hong Kong Chief Executive Carrie Lam welcomed the plan. She sees opportunities to identify new areas of growth for Hong Kong as well as the chance to diversify the development of the economy and industries.
However, the planning of the China Greater Bay Area has its critics from Hong Kong citizens. A poll conducted by the Chinese University of Hong Kong found out that over 45 percent of respondents believe that the advantages to Hong Kong will be counterbalanced by equal losses.
