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One year on, HK, Macao benefit steadily from Greater Bay Area
2021-01-13 19:11:29

By Xinhua

This undated photo shows a night view of Zhuhai, a Guangdong province city in the Guangdong-Hong Kong-Macao Greater Bay Area city cluster. (PHOTO / CHINA DAILY)

HONG KONG - One year ago, China unveiled a master plan to develop its southern bay area into a world-class city cluster, a global technology and innovation center, and a livable and business-friendly area.

With a string of follow-up measures put in place since then, the bay area, officially known as the Guangdong-Hong Kong-Macao Greater Bay Area, witnessed steady development. Cities in the bay area have built increasingly closer ties with each other and achieved much easier flows of talent, goods and capital.

New vitality has been injected into the bay area with a total area of 56,000 square km, a population of about 70 million, and an economy of 10 trillion Chinese yuan (US$1.43 trillion).

With more emerging growth opportunities, the Greater Bay Area is looking forward to an even brighter future, observers said.

ALSO READ: HK, Macao join hands to tap opportunities of Greater Bay Area

IMPROVING INTEGRATION

Shortly after the unveiling of the plan, the Chinese government rolled out specific measures in the coming month in an effort to turn the blueprint into reality.

Tax concessions for Hong Kong and Macao people working on mainland cities of the Greater Bay Area were announced in March, among others. Eight months later, more favorable policies were hammered out, such as encouraging those people to purchase properties on nine mainland cities and granting their children equal education there.

Such measures designed to make it easier for people to work across the Greater Bay Area are key to talent mobility, KPMG China's Hong Kong partner Maggie Lee said. "The policies have created tangible benefits for Hong Kong businesses and residents."

Major infrastructure projects including the Hong Kong-Zhuhai-Macao Bridge and the Guangzhou-Shenzhen-Hong Kong Express Rail Link also started operation, which allowed dwellers of the Greater Bay Area to easily travel from one city to another. The transport network has become so convenient that it is even possible to take morning tea in Guangzhou, do business in Hong Kong in the afternoon, and enjoy night view in Macao.

Experts said the improvement in connectivity is significant to further unlocking the economic potential of the Greater Bay Area, pushing forward integrated development, and bolstering the confidence of businesses in the future of the Greater Bay Area.

BUSINESSES SPEED UP EXPANSION

A survey jointly conducted by KPMG China, HSBC and the Hong Kong General Chamber of Commerce (HKGCC) showed in January that 747 executives of businesses in the Greater Bay Area are bullish about both their own and the region's prospects, and most of them are planning to expand to other cities in the area.

Union Medical Healthcare (UMH), a non-hospital medical services provider, has given a priority to the Greater Bay Area in its development strategy.

"We are focusing on areas within one-hour travel distance of Hong Kong, where we can tap into potential markets efficiently," said UMH CEO Eddy Tang. "With rapidly-growing GDP of the Greater Bay Area, the health care market there boasts the enormous potential to see booming growth in the future."

The company, currently owning 10 outlets in Guangzhou and Shenzhen, plans to open 30 to 50 more clinics in the mainland in three to five years, mainly in the Greater Bay Area outside Hong Kong.

"We are focusing on areas within one-hour travel distance of Hong Kong, where we can tap into potential markets efficiently," said UMH CEO Eddy Tang. "With rapidly-growing GDP of the Greater Bay Area, the health care market there boasts the enormous potential to see booming growth in the future."

The company, currently owning 10 outlets in Guangzhou and Shenzhen, plans to open 30 to 50 more clinics in the mainland in three to five years, mainly in the Greater Bay Area outside Hong Kong.

KPMG China's Lee said firms have become increasingly interested and involved in the Greater Bay Area.

In Hong Kong alone, 96 percent of respondent businesses express confidence in the Greater Bay Area and expect their business revenue will grow, a survey showed. To capitalize on the opportunities, more than half of the businesses either have made a strategic plan or are in the process of formulating one.

OPPORTUNITIES TO SEIZE

Terence Chiu, HSBC's Hong Kong head of commercial banking, expressed strong optimism about the plan on the Greater Bay Area as enormous opportunities will be generated for businesses from the coordinated development of Hong Kong, Macao and nine cities in Guangdong province.

During the past year, the HKGCC has organized a series of seminars and business tours to discuss and explore the opportunities of the Greater Bay Area, which were in particular welcomed by small and medium-sized enterprises.

"The bay area is one of the few places where businesses can expand their presence and seek higher returns over the next few years," Yu Pang-chun with the HKGCC said, stressing that it has the potential to become the most important opportunity for businesses and reshape Hong Kong's business environment for decades to come.

Yu said companies should not hesitate to enter the Greater Bay Area market. "They should act now in case of missing the chance even if they may not be 100 percent sure that they can seize it."


Commerce, trade and reinvention have always been at the heart of Hong Kong’s success. Just as important

is the city’s trusted position in the international marketplace, and the important role it continues to play as China increasingly opens up to foreign investment and pursues further globalisation. This provides Hong Kong with a significant opportunity to maximise the benefits from the Greater Bay Area (GBA) Initiative, which aims to economically integrate Hong Kong, Macau and the nine cities in Guangdong’s Pearl River Delta, and to create a globally competitive business region.

With a population of more than 69 million and a total GDP of USD 1.53 trillion (similar to that of Russia and slightly larger than Australia), the continued development of the GBA offers Hong Kong an opportunity to leverage and scale its strengths and competitive advantages.

For example, Hong Kong’s role as an international finance centre and offshore RMB hub leaves it well- placed to be at the centre of investment, financing, deal and venture capital activity.

In addition, the city can be at the forefront of the development of the GBA as a technology and innovation hub by helping to create the funding ecosystem that is essential to fostering innovation and entrepreneurship, as well as greater business-to-business engagement and collaboration.

The key to Hong Kong’s continued economic success will be the preservation and extension of its economic freedoms, the rule of law and an independent judiciary, its favourable tax environment and the overall ease

of conducting business in the city. Such significant advantages can be preserved under the principle

of “one country, two systems”, while at the same time embracing the commercial potential of greater collaboration within the GBA – these goals are not mutually exclusive.

As one of the world’s freest economies, business has always played a central part in Hong Kong’s success. Australia’s largest international chamber, the Australian Chamber of Commerce in Hong Kong – together

with the new Australian Chamber in Macau and the Australian Chamber in Southern China – is pleased to partner with KPMG in Hong Kong to present ideas from our international business community which paint a bold and ambitious view of the future offered by the GBA Initiative. We firmly believe that Hong Kong’s international business community has a significant opportunity to take the lead and help shape the development of the GBA.

We interviewed around 30 business leaders and entrepreneurs in late May and June and have sought

to reflect the wide variety of recommendations across

a range of industries in this paper. The purpose of

the publication is to stimulate discussion and debate around how best to leverage Hong Kong’s strengths and maximise business opportunities to deliver mutually beneficial growth across the GBA.

Some other key themes we seek to address in this paper include how rules and regulations might be reframed to allow for greater efficiency and collaboration in the GBA, the barriers for Hong Kong and international companies wishing to do business in the region, and the ways in which the GBA can serve as a springboard for China’s ongoing internationalisation.

It is our hope that our ideas deliver a strong commercial contribution to discussions and plans on the way forward for the GBA, which has thus far been driven primarily by governmental and public authorities.

KPMG and AustCham would like to express their gratitude to all the executives who kindly participated in interviews for this report.