Chinese modernization through the promotion of new quality productivity forces was one of the key themes in China’s annual two sessions, which was held in Beijing last month. As a key player in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), which is designated as a leading region for Chinese modernization, Hong Kong is expected to play a major role in the development of both the GBA and new quality productivity forces.
National political advisers have provided suggestions to accelerate the integration of the GBA market over the past year, according to Liu Jieyi, spokesperson for the second session of the 14th National Committee of the Chinese People’s Political Consultative Conference. Proposals include optimizing cross-border compliance systems for financial data, promoting digitalization in industries, and establishing mechanisms for sharing talents across regions.
With a population of 87 million, the GBA’s combined regional gross product output rose to more than 13 trillion yuan ($1.8 trillion) in 2022, which was equivalent to over 10 percent of the GDP for all of China, making it one of the most promising economic growth regions worldwide.
In February 2019, China’s central authorities issued the Outline Development Plan for the GBA. Over the past five years, the GBA has become one of the most open and economically dynamic areas in China, and it has been picked as a leading region for Chinese modernization through high-quality development.
During the 2024 Spring Festival holidays, people from the Chinese mainland, Hong Kong and Macao made more than 5 million cross-boundary trips, and a record number of passengers and vehicles crossed the Hong Kong-Zhuhai-Macao Bridge.
Data from the Hong Kong tourism authority showed that the occupancy rate of Hong Kong’s hotels crossed 80 percent during the holiday, indicating increasing connectivity among people in the GBA.
Now that we are reading in the media about China’s economic slowdown, or even about Hong Kong being far from its best days, it seems like a good time to consider the GBA’s enormous potential.
When, in 1992, Deng Xiaoping embarked on his famous southern tour, inspecting Guangzhou, Shenzhen, Zhuhai and Shanghai, he reinforced the implementation of reform and opening-up with important remarks, pointing out how this area would be a game-changer in future. The southern tour was seen as the final major political act of Deng’s career.
In order for Hong Kong to enhance its role as one of the most important financial centers and show to the world that it is far from being “over” but quite the opposite, it needs to leverage the GBA
The GBA has sometimes been called “China’s Silicon Valley”, and not without reason. I could add countless data to support this affirmation, but it would be pointless for the purpose of this article. Suffice to say that the GBA has the potential to bring more economic growth, new jobs and therefore prosperity to the region.
As per the 11 chapters of the Outline Development Plan, each of the partner cities will play an important role based on their respective strengths. For example, Hong Kong will play a key part as a financial center, while Shenzhen, where cutting-edge technology companies like Huawei and Tencent are based, will leverage its technological prowess.
Why is the GBA important for Hong Kong? While Hong Kong profits from being the gateway to the Chinese mainland, this role will admittedly diminish as the nation opens up its economic and financial system, making it progressively easier for foreign investors to make direct contact without going through an intermediary. Thus, it would be wise for Hong Kong to diversify its economy as much as possible, and seize hold of any opportunity to do so. And the GBA is, without any doubt, just the ticket for the many good opportunities it offers.
While, Hong Kong went through the Asian financial crisis, SARS, the global financial tsunami, and the COVID-19 pandemic without diminishing its role as one of the world’s most important financial centers because of Hong Kong’s strength, it is no less true that Hong Kong needs to grasp any opportunity to enhance its status.
Certainly, Hong Kong now is embracing opportunities from the GBA development, and, by playing an active part in China’s 14th Five-Year Plan (2021-25), the HKSAR is unleashing its potential thanks to unreserved support from the central authorities for advancing key strategies to upgrade its “superconnector” role, including the digital yuan and environmental, social and governance.
In addition to the huge role that the GBA will play in Hong Kong’s future, we can also mention other opportunities such as fintech development in Hong Kong, the HKSAR’s anticipated entry into the Regional Comprehensive Economic Partnership, and the Connect Schemes.
Fintech wise, Hong Kong and the rest of the GBA are indeed increasing their role as fintech hubs. The Fintech 2025 blueprint aims at pivoting the HKSAR toward a friendlier regulatory regime for digital assets, positioning the city to become a virtual assets center/crypto hub. Hong Kong has also stepped up efforts to develop itself into one of the world’s most important Web3 hubs.
Previously, I have discussed how the Hong Kong Special Administrative Region is becoming an important greentech and Web3 hub, and the potential that Hong Kong has in the area of Central Bank Digital Currencies, especially when it comes to the electronic Hong Kong dollar.
One of the key reasons for the success of all these initiatives is the fact that Hong Kong is part of the GBA. The GBA undoubtedly enhances Hong Kong’s future potential and, at the same time, enhances the potential of the rest of the bay area.
In this sense, financial cooperation between the special administrative region and the rest of the GBA is growing every day and will without doubt become the key in the coming years.
As noted by the HKSAR government in the past, the Outline Development Plan confirms and supports Hong Kong’s status as an international financial center, a global offshore renminbi business hub, and an international asset and risk management center. It also supports the city’s development as a green financial center and an investment and financing platform serving the Belt and Road Initiative.
To sum up, in order for Hong Kong to enhance its role as one of the most important financial centers and show to the world that it is far from being “over” but quite the opposite, it needs to leverage the GBA, which has enormous potential, as pointed out at the two sessions.
The author is a fintech adviser and researcher. He holds a Master of Business Administration and a doctorate in Hong Kong real estate law and economics. He has worked as a business analyst for a Hong Kong publicly listed company.
The views do not necessarily reflect those of China Daily.
