The GBA Initiative- Economic Boom Waiting to Happen
On February 18, 2019, under the guidance of the Chinese central government the experts publicized an Outline Development Plan for the Guangdong-Hong Kong- Macao Greater Bay Area (GBA). This plan is expected to start a closer collaboration amid 11 cities in the Pearl River Delta region of Southern China. The aim is to make a group of cities around the Pearl River Delta as good as other similar bay ranges, such as - the Tokyo Bay Area, the New York Bay Area, and the San Francisco Bay Area.
The idea of making a Greater Bay Area was established in the year 2015 through a policy paper on China’s Belt and Roads initiative. Moreover, in 2016 the idea was given wings when the Central Government incorporated it in the 13th 5-year plan covering the 2016-2020 period.
Main Features of the GBA Initiative
The initiative is starting in the Guangdong Area.
It is spread over nine Pearl River Delta cities, which are - Shenzhen, Zhaoquing Guangzhou, Foshan, Zhuhai, Dongguan, Zhongshan, Jiangmen, and Huizhou, along with the two Special Administrative Areas of Macau and Hong Kong.
The entire region comprised in the initiative has 31% of the total area and 62% of the total population of the Guangdong Province.
The prime focus of the GBA Initiative
The project is initiated for the four best cities - Hong Kong, Macau, Guangzhou, and Shenzhen. Hong Kong is worldwide famous as a logistics, financial, and trading center. While Macau is an excellent vacation and tourism destination and a chief organizer of trade with China and the other Portuguese speaking countries. Guangzhou is significant, as it is a provincial capital, besides a chief culture and education center. Shenzhen obviously, has a distinct position, as it is China’s first Special Economic Zone popular for its advanced high tech technology.
GBA as a Global Invention and Technology Hub
GBA is geared up to turn into a big international innovation and technology hub. This will aid the young population of Hong Kong and Macau to use their innovative talent by getting involved in startups, and will thus empower them. The growth and evolution of GBA will aid assimilate Hong Kong and Macau R&D institutions in Guangdong and come on par with inland businesses by bringing into line these with national and provincial policies in regard of such innovation. Actually, Hong Kong has a good prospect of emerging as a financial center for the high tech industry in the GBA. This would result in a considerable boost to Hong Kong and Macau trendsetters all due to the incubators across the nine PRD municipalities.
Infrastructural Connectivity is the Key
The reason for the GBA success is the quick application of chief infrastructural connectivity projects. The plan comprises supporting the position of Hong Kong as a chief aviation hub as well as by expanding the Macao and Shenzhen Airports. The planned expansion and growth also includes a second airport in Guangzhou.
The increase of fundamental infrastructure is projected to lessen inter-city travel time within the GBA to an hour or less. Moreover, swift clearance measures for the express rail and Hong Kong- Zhuhai-Macau Bridge and the institution of a single ticket and single card travel across all modes of transport is also on the agenda. Extensive accessibility of free high-speed internet through hotspots set up along main routes is also the part of the infrastructural connectivity plan.
Targeting for Top Position amongst Bay Economies
Situated in the Guangdong area, which is 14% of the national aggregate, the Pearl River Delta area has already surpassed Tokyo and has become the world’s major urban area on the basis of the size and population. The GBA has a population of 70 million and a $1.56 trillion economy, which is around the size of the Russian economy, greater than Australia and just a little less than South Korea. If it were a country, it would be a rich one! By next year the total turnover of GBA will begin surpassing that of Tokyo Bay Area. The GBA will surpass the turnover of the Tokyo Bay Area in a decade from, which will make it the world’s biggest bay economy.
Augmenting the Universal Role of RMB
This will occur on the basis of a more profound financial integration, which will include many things. This includes turning Hong Kong in the investment and financing platform to aid back the Belt and Road scheme and encourage banks and insurance companies from Hong Kong and Macau to set up processes in Zhuhai, Shenzhen, and Guangzhou. Macau is anticipated to become a booming place by expanding the business with Portuguese speaking people and by playing the part of a RMB clearing center. Rising the usage of RMB through the GBA and the establishment of a Greater Bay Commercial Bank in the Guangdong Province will additionally put the emphasis on augmenting the international role of RMB.
Redefining Hong Kong
Hong Kong has had a reputation of being a global trading powerhouse for most of the last century and beyond. The strategic position of Hong Kong within GBA has meant that Hong Kong is controlled to play a star second innings taking advantage of its international connections to appeal the best talent and result in a healthy mixture of capital in the area. This will result in added and bigger growth of the well-known Hong Kong financial services sector.
On can also believe the Hong Kong International Airport to keep a central spot as a global aviation hub and work as an agent for the coming up of additional airports in the GBA. This will give a push to the region to develop as a global hi-tech and innovation hub resulting in the acme of youth-driven entrepreneurship in the region.
Amongst the several steps being taken in this respect are the Lok Ma Chao loop initiative within the Hong Kong-Shenzhen Innovation and Technology Park, offering financial support and mentoring to young entrepreneurs in the GBA and making technology, healthcare, AI and robotics research groups. Other than this, there are a lot of other initiatives to aid foster local talent, as also upsurge the funding for scientific research for universities and offer tax relief to businesses investing in R&D. There are other suitable incentives and amenities, such as the Technology Talent Admission Scheme, Innovation and Technology Venture Fund and a GBA Academic Alliance to aid Hong Kong to become the flag bearer of the GBA.
Factors That Support GBA’s Imminent Success
GBA is set to become a huge success on the basis of several critical aspects, which indicate to it. The first factor is the simplicity of making payments within the GBA with the assistance of the HK Fintech Association. Amongst the plans on the anvil for the smooth movement of money across the borders is the overview of a type of a blockchain standard for the GBA along the lines of the European Blockchain Standard.
The second factor is the intended consistent tax system across the GBA, which will ease intra-region mobility. The last most important factor to be considered has to be the restructuring of FDI rules and cross border trade consistently across the region, so as to make the whole region rank extremely high in the ease to business index.
GBA to Support the Belt and Road Initiative
The GBA’s power spreads way past the Pearl River Delta area to even impact and support the influential Belt and Red initiative. It can have a stellar role to play in its capability as a global RMB business hub and service center to smoothen investment and commercial operations relating to the Belt and Road projects.
Moreover, it can play a vital role in empowering Macau to arise as a chief contestant in funds, such as - the China Africa Production Capacity Fund and The Asian Infrastructure Investment Bank, the Silk Road Fund, the Sino-Latin American Production Investment Fund.
Conclusion
With the global finance and infrastructure model changing the way it is in making the 21st century an Asian century, the world is seeing a chief rearrangement from Europe and North America centric regime to once again make this region the leading economic player on the global stage. The GBA is going to be right there in the front helping fire this new line.
