Development Plan for Guangdong-Hong Kong-Macao Greater Bay Area and Fintech(1/2)Formation of Economic Zone of over 1.6 trillion dollar worth of GDP

This article is written by Mr. Koichiro Ohira, Chief Fellow, Institute for International Socio-Economic Studies（NEC Group）

Close relationship
In the southen area of China there are Guangzhou and Shenzhen, main cities of Guangdong province, and Hong Kong and Macau.

These main cities are closely located with each other and have played an important role to contribute greatly to the economic growth of China.

The Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area formally issued by Chinese Central Government in February, 2019 is one of the essential projects under the leadership of Xi Jinping president. Chinese Central Government announced the policy to deepen the collaboration and cooperation between Chinese mainland and Hong Kong and Macau while maintaining the 'one country, two systems' formula applied for these two cities.

Area covered by the plan represents gigantic economy zone with population of more than 70 million and with GDP of 1.6 trillion dollar (ca. 171.2 trillion yen). They are targeting at promoting or enhancing the big bay area similar to New York, San Francisco and Tokyo.

Promotion by area as a whole
Shenzhen, center city of this plan, is dubbed the Chinese Silicon Valley and is famous and popular for its innovation city based on advanced ICT.

In the plan the utilization and development of innovative technology and active promotion of start-ups is not limited to Shenzhen but further extended to the whole area of this plan.

In order to achieve the target the corridor of science and technology innovation is set up covering Guangzhou, Shenzhen, Hong Kong and Macau, and in this corridor a number of facilities such as Guangdong-Hong Kong-Macao Greater Bay Area Big Data Center and national model district for people to start business and to promote innovation are planned to be deployed.

In order to promote free movement of people and products within the area the high-speed train systems and highway roads are being constructed and prepared.

The transfer is secured within one hour between Hong Kong and Macau through Hong Kong-Macao Greater Bay Bridge of 55 kilometer length and also between Guangzhou and Hong Kong by high-speed train.

Shenzhen-Zhongshan Bridge is also constructed between Shenzhen and Zhongshan, city located opposite to Shenzhen.

Institutional reforms are also in place to activate the flow and exchange of people within the area by such policies as reduced income tax scheme for high level talented personnel outside of mainland China, increase and promotion of employment of personnel from Hong Kong and Macau by the local government of Guangdong, speed-up of customs clearance, coordination and collaboration of higher education institutions.

The area will be the important center for trade to support the Belt and Road Initiative, and also the judicial exchange is progressed among Guangdong, Hong Kong, and Macau.

Activating each city
The plan is not aiming at uniformization or equalization of cities in the area, but, at activating each city by introduction of new innovative technology while such main strength of each city is maintained as core strength such as finance of Hong Kong, tourism of Macau and ICT of Shenzhen.

The outcome and results of research by universities and research institutes of Hong Kong will be ready for practical use and put for industrial use.

Optimization will be chased and enhanced in the area based on the eco-system in such a way as private companies having research and development section in Shenzhen while having legal section in Hong Kong.

The most essential issue right now is the demonstration in Hong Kong against extradition bill and others against the mainland China.

It seems that the plan is targeting to draw Hong Kong and Macau closer to the mainland China, but, the suspicion and distrust of Hong Kong citizens are too strong to wipe off and this situation might be the big obstacle to the promotion and progress of the plan.

In the next issue I will report more on the financial and fintech situation in China.