What is the Greater Bay Area Initiative?
If you’re looking to build a business in China, you can by no means afford to ignore the Greater Bay Area and the developments in the area.
First things first, what is the Greater Bay Area? This is a geographical area that comprises the two Special Administrative Regions of Hong Kong and Macao, and the nine municipalities of Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing. This region is the country’s most open and economically vibrant region. One of the most notable of the Chinese mainland’s urbanization initiatives is the strategic development of the Greater Bay Area to develop a world-class urban cluster on the lines of similar bay areas in San Francisco, New York, and Tokyo The Greater Bay Area Outline Development Plan outlines a series of measures to build the area as the center of business innovation and expansion. There are strategic blueprints to increase cooperation amongst Guangdong, Hong Kong, and Macao, nurture in-depth integration within the region, and drive coordinated economic development. We look at some key factors that make this region the hotbed of all economic and business activity in China.
What is the Greater Bay Area Initiative?
The Population of the Greater Bay Area is Twice That of Canada and More Than the Whole of the UK. The Nine cities in Guangdong province and the Special Administrative Regions of Hong Kong and Macau make up 5 percent of China’s total population at a combined population of about 70 million (as of 2017). This, in turn, means increased business opportunities, networks, and customers besides a supply of quality human capital.
The Greater Bay Area contributes 12 percent of GDP
While it occupies less than one percent of China’s land area, it accounts for 12 percent of the national GDP. In 2017 alone, it added US$1.5 trillion to the Chinese economy. To put this in perspective, that figure is almost twice the San Francisco Bay Area’s contribution in the same year.
Air Freight Traffic Across the Greater Bay Area is Greater than the Combined Figures of the Bay Areas of San Francisco, New York, and Tokyo
Besides the existing volumes of air traffic, China also has ambitious plans for the development of a world-class airport in the area. It is looking to expand the capacities and transport links of existing airports. There are also efforts to enhance Hong Kong's role as an
aviation management training center to improve the efficiency of air freight traffic.
The Greater Bay Area Houses Three of the World’s Top 10 Container Ports
Shenzhen, Guangzhou and Hong Kong ranked in the world’s top 10 container ports and handled more than 66 million TEUs in 2017, which is significantly greater than any other bay area.
Hong Kong is Poised to be a Green Bond Hub for Global Investors and Mainland Issuers
Green bonds are used to fund environmentally friendly projects and are fast gaining popularity with investors. Hong Kong is home to one of the world’s biggest green bond markets highlighting its long term commitment to environmental sustainability. The Hong Kong government helps lower the costs for issuers by subsidizing the issuance of green bonds. As a result, mainland Chinese green bond issuers rely on Hong Kong to connect with international investors.
The Provincial Capital of Southern China, Guangzhou, will become a Transport Hub
The Greater Bay Area master plan envisions Guangzhou as an international transport hub. This plan aims to drastically increase the length of railway in and around the city to 1,243 miles by 2035, an increase of almost five times. The local transport system in Guangzhou is also exceedingly efficient with nearly 30,000 taxis and over 10,000 electric buses serving nearly six million passengers every day. The Guangzhou government also plans to build subway lines and highways to connect the city to neighboring municipalities. In terms of aviation, a second international airport is being planned to build the city as a key transport hub for passengers and goods.
High R & D investment in Shenzhen
In fact, this R&D investment is only matched by South Korea and Israel. Shenzhen houses over 3 million businesses including tech giants such as Huawei, Tencent, and DJI among several others. Shenzhen’s investment in research and development in 2018, more than US$14.9 billion (about 4 percent of its GDP) is one of the world’s highest.
Macau’s Place as the World’s Entertainment Hub
Macau has a vibrant tourism industry and visitor numbers are expected to increase further through partnerships with Portuguese-speaking countries. The Greater Bay Area master plan aims to create a favorable environment for hosting international events. There has also been a significant investment and interest in integrated tourism and entertainment development in Hengqin. For instance, companies have invested upwards of US$750 million in Novotown, a development that features performance halls, indoor theme parks, hotels and entertainment venues.
Dongguan will develop a hub for the Service Industry
Dongguan is a manufacturing hub and home to about 9,000 foreign-backed enterprises in five industries - including electrical machinery, electronic information, textiles, food processing, and paper production. Going forward, there will be an increased focus on ecommerce, financial insurance, and technology services.
Excerpt from Market Entry 10x Series (2020), co-published by Brainsfeed and TCP Growth