context: Investments from Hong Kong and Macao helped created Shenzhen’s economic miracle in the 1980s; a new integration plan some 40 years later in the same region aims to generate growth engines for a much larger economy beginning to slow.
On 18 February 2019, China unveiled a blueprint for development of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) in an effort to compete with other top bay areas in New York, Tokyo and San Francisco.
The core of the plan is primarily political, which is to integrate Hong Kong and Macao in China’s national development and ensure the two cities’ long-term prosperity and stability, says Ding Li 丁力 Guangdong Academy of Social Sciences director.
He explains that Hong Kong and Macao are key to GBA development. As the plan indicates, Hong Kong’s advantage in modern service sectors will play a leading role in generating business growth overseas. Hong Kong is also mentioned more times in the plan than other major cities, he notes.
Zhang Xiaoming 张晓明 State Council Hong Kong and Macau Affairs Office director says Hong Kong and Macao boast irreplaceable advantages, including Hong Kong’s status as the world’s largest offshore RMB centre as well as its high-quality education system and strong innovation capacity, which could match well with Guangdong’s sophisticated manufacturing industries.
Compared with other bay areas, GBA’s unique character—one country, two systems—could pose obstacles to implementation, reports Yicai.
As Hong Kong, Macao and the mainland have different institutional arrangements, including customs regulations, currencies, financial systems and legal institutions, it will be difficult to ensure free flow of people, capital and information in the region, says Yicai, noting that to address these differences, the GBA plan must facilitate trade, investment and mobility of human resources.