On February 18, a new outline for the Guangdong-Hong Kong-Macao Greater Bay Area was released providing instruction and guidance for the development of the region that will lead the country’s next stage of economic growth
The long-awaited Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) was released on February 18. It was published after “significant process” was made last year, as revealed by the director of the office, Zhang Xiaoming.
Issued by the Central Committee of the Communist Party of China and the State Council, the outline not only provides instructions and guidance for the evolution of the area but it also makes clear the role and position of each city within the GBA, setting the plan’s goals to achieve by 2035.
Beijing’s mission is to transform the region into a new technology and innovation hub based on the Silicon Valley model with the aim to overtake the world’s three major bay areas, namely New York, San Francisco, and Tokyo. Therefore, to build the largest and richest cluster of world-class cities for work, life, and leisure, which will enhance the overall economy.
China’s Greater Bay Area is composed by Hong Kong, Macao, as well as the nine municipalities of Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen, and Zhaoqing in the Guangdong Province.
The region covers a total area of 56,000 square kilometers with a combined population of approximately 70 million, which is greater than the Tokyo Metropolitan Area, more than the whole population of the UK and twice that of Canada.
It accounts for less than 1% of China’s territory and 5% of its population but generates nearly 12% of national gross domestic product. In 2017, it was about $1.58 trillion GDP, more than the Australian one and about the same as South Korea or Russia. It also doubles the value of the annual contribution made by the San Francisco Bay Area.
© Greater Bay Area. Comparison with other Bay Areas. The Chinese Government wants to build the GBA as the largest bay economy by 2020.
The concept of the Greater Bay Area dates back to 2011 when the “Action Plan for the Bay Area of the Pearl River Estuary” was released by officials and it was then reinforced at the beginning of Xi Jinping’s 13th Five Year Plan in 2016. This led to a framework agreement to build the cluster in Southeastern China.
The project’s main objective to improve cooperation within the region with a multi-level approach is ambitious. Over the years, the local cities have become China’s key players in the country’s fast growth but the potential extends way beyond the Pearl River Delta region.
Therefore, in addition to strengthening the distribution network in the field of manufacturing and hi-tech services, the improvement of cooperation within the GBA will enhance the Dragon’s Belt and Road Initiative, the plan that aims to link economies along a renewed Silk Road.
First and foremost, the Outline Development Plan confirms that Hong Kong, Macao, Shenzhen, and Guangzhou are the four key cities of the bay area and the core engines for regional progress.
In order to reach the main goal to turn GBA into a global technology innovation center and finance powerhouse with advanced manufacturing and modern services industries, the plan needs to ensure that people, goods, and services would be able to flow freely within the region. Hence Beijing’s decision to publish a project’s roadmap, which also delineates reform measures to be tested there.
According to the report, one of the plans is to upgrade and expand airports in the four core cities of Hong Kong, Macao, Guangzhou, and Shenzhen and to accelerate construction of large-scale oil reserve bases in the Pearl River Delta area.
© Unsplash. Man Cheung Street, Hong Kong. Under the GBA plan, Hong Kong is positioned as international finance, shipping, and trade center.
For what concerns finance, the guidelines set measures to improve the connectivity of financial services in the region, with an emphasis on expanding cross-border transactions using the yuan to reduce the inconvenience of exchanging the three currencies used here. Therefore, companies in the Greater Bay Area will be allowed to issue yuan-denominated bonds within the area.
The outline thus highlights the importance of Hong Kong as an international financial hub and as a key offshore center for the yuan and it also pledges to support Macao in becoming an international financial service center to serve the Portuguese-speaking population.
Moreover, Macao, the world’s entertainment hub, will also partner with Zhuhai to boost tourism developing world-class tourism and leisure facilities.
According to the Outline, “The development of the Greater Bay Area is not only a new attempt to break new ground in pursuing opening up on all fronts in a new era, but also a further step in taking forward the practice of ‘one country, two systems’.”
Guangzhou, instead, in addition to being one of the busiest ports in China, will become an international transport hub. There are plans to drastically increase by five times the length of railway in and around the city in order to carry almost 400 million departing passengers a year.
Shenzhen is confirmed to be China’s hi-tech innovation capital. It is currently home to over 3 million businesses, including tech giants such as Tencent, Huawei, and DJI. Therefore, investments in research and development will continue to be one of the world’s highest.
While the neighboring Shenzhen is known as China’s Silicon Valley, Dongguan and Foshan in Guangdong Province are home to many of the region’s factories. Indeed, the area is at the heart of a network of supply chains that link Guangdong to the rest of the world and is able to draw on a strong manufacturing base. In particular, by the outline’s plan, Dongguan will develop as a hub for the service industry, with a focus on sectors such as financial insurance, e-commerce, and technology services. Plus, the plan aims to develop the city into a globally competitive cluster of high-end manufacturing industries.
© Greater Bay Area. Not only Guangzhou or Shenzhen, among all the 11 cities, the key point will also be new first and second-tier cities like Dongguan.
The Greater Bay Area plan is also supported by three key infrastructure projects.
The first is the recently opened Hong Kong-Zhuhai-Macao Bridge (HZMB), opened in 2018, which significantly reduces travel times from Hong Kong to Zhuhai and Macao. Actually, Liu Xiaodong, a major designer of HZMB, told China Daily that there will be five bridges across the Pearl River Estuary by around 2035, or one sea crossing every 20 kilometers parallelly.
The second key infrastructure project is the high-speed rail link, also opened in 2018, which connects Hong Kong to Shenzhen and Guangdong, thus to China’s vast high-speed rail network.
A third project is the Shenzhen-Zhongshan Corridor, which is expected to be completed by 2024. It will be an 8-lane highway and will give Shenzhen direct road access to the western part of the Pearl River Delta, cutting more than 100 kilometers from the current journey.
Once fully integrated, the GBA will bring the region to a greater position of strength to carry out two other important phases of the project: the increase in the value of the Chinese economy introducing competences and promoting internationalization, both important for the next stage of China’s economic development.
© HZMB Authority. The Hong Kong-Zhuhai-Macao Bridge is a 55-kilometer-long bridge-island-tunnel complex across the Pearl River Estuary. It is both the world’s longest sea crossing and the world’s longest immersed tunnel for road traffic.
In 1978, Deng Xiaoping launched all the reforms and opening policies that shaped the economic evolution of today’s China and the Pearl River Delta region was the key driver.
Today, the GBA is already one of the most dynamic and open areas of the Middle Kingdom. After many years as the “factory of the world”, the region is striving to focus on even more openness and innovation with the aim to drive also the next stage of economic development.
If the project is developed according to the plan, the region will turn from the “factory of the world” to the leading center of innovation and services with a GDP of $4.62 billion by 2030.
Therefore, on one hand, the outline is giving the right direction for the improvement of the Greater Bay Area, but on the other hand, it is providing also a new model for the Dragon’s economic growth.
Moreover, although the initiative aligns with the country’s Made in China 2025 plan, it also sends a strong signal to its counterpart at the opposite side of the ocean – the United States – showing China is not just ready to become a superpower but it is also already catching up in terms of economic prestige.
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