18 June 2019
Connecting opportunities in the Greater Bay Area
The Greater Bay Area (GBA) is a collaborative initiative and a significant opportunity to shape the future of Hong Kong and the ten other cities within the Pearl River Delta. With a combined population of over 69 million and a GDP of USD 1.53 trillion as at the end of 2017, the region is well-positioned to play a leading role in advanced manufacturing, technology and innovation, transportation, trade and finance.
Furthermore, the ability to rapidly adapt and reinvent, as well as the sheer scale of the China market, are helping to foster innovation and propelling economic growth in the region. With the transformation of the GBA into an innovation and technology hub highlighted as a key objective, this presents a number of opportunities for businesses – including small and medium-sized enterprises – to invest in R&D, develop and test their ideas, nurture technology talent, forge strategic partnerships and drive growth. The development of the Lok Ma Chau Loop into the Hong Kong-Shenzhen Innovation and Technology Park (HSITP) on the border of the two cities is one example of this transformation, aimed at providing 87 hectares of dedicated space for start-ups, technology companies, higher education institutions and other innovation elements of an ecosystem.
The creation of a ‘quality living circle’ within the GBA – providing an ideal place for living, working and travelling – is also a key opportunity. This involves the development and enhancement of new and existing lifestyle facilities around sports and recreation, arts and culture, tourism and hospitality. Coupled with this is the ongoing expansion of the region’s transport and logistics network to enhance connectivity and the flow of goods, people and resources between cities. New transport infrastructure – including the Guangzhou-Shenzhen-Hong Kong Express Rail Link, Hong Kong-Zhuhai-Macau Bridge and Guangzhou-Zhongshan-Zhuhai-Macau intercity railway – will dramatically reduce travel times between GBA cities, creating greater opportunities for closer cooperation and partnerships, while enhancing the liveability of the region.
However, incorporating three separate tax jurisdictions – mainland China, Hong Kong and Macau – can create challenges for both businesses and workers in the region. The provision of a mutual tax exemption for certain professionals – including academics and researchers – and for frontier workers could help address these challenges and facilitate the free movement of people in the GBA.
To realise the full potential of the GBA, the cities in the region must leverage their diverse range of competitive advantages to create significant business opportunities and drive economic growth. The GBA is able to draw on a strong manufacturing base in Dongguan, Guangzhou, Foshan and Huizhou, Shenzhen’s advanced manufacturing, IT, technology and innovation strengths, and Macau’s status as a global tourism and leisure centre.
This is supported by Hong Kong’s role as an international centre for finance, asset management, transportation, trade, arbitration and legal services. Indeed, much of Hong Kong’s success as a global financial centre stems from the fundamental bedrock of the common law system. In addition, Hong Kong’s professional and financial services community represents a deep and diverse talent pool with international experience. Hong Kong’s unique position as a gateway between the international market and mainland China remains a major advantage.
For Hong Kong, the business leaders we spoke to believe the key to maintaining the city's economic success and its role as an international financial centre lie in continuing to leverage its competitive advantages, while at the same time embracing the mutually beneficial commercial potential of greater collaboration within the GBA.
This report reflects the opinions and findings from interviews with around 30 business leaders and entrepreneurs in Hong Kong on how to leverage the city’s strengths and maximise business opportunities to deliver mutually beneficial growth across the GBA.
In addition, this report adds a compelling voice from the international business community to discussions around the GBA which have primarily been led by governmental and public authorities. It aims to stimulate debate around core challenges, and proposes possible solutions supported by some of Hong Kong’s business leaders.
Many of the ideas presented in this paper on behalf of the international business community are ambitious and visionary. Some are preliminary, and are offered to encourage robust debate around this important initiative. Some ideas have been discussed within sectors previously, while others may be new.
This is an examination of the GBA from a commercial perspective alone and does not attempt to canvas the many additional complex issues which we acknowledge are an intrinsic part of this initiative.
As the GBA continues to develop, close cooperation between local governments and regulators will be key in helping to facilitate the seamless movement of goods, capital and people, as well as encouraging innovation and entrepreneurship in the region. However, it is also important that local governments and regulators within the GBA prioritise close relationships with the private sector to build confidence around this initiative. Fostering collaboration rather than competition can only be achieved by listening to all stakeholders, including the international business community.
Please click to read full report.