Greater Bay Area: A dynamic growth engine of the world

Daryl Ng, Chairman, Greater Bay Area Homeland Youth Community Foundation

Greater Bay Area: A dynamic growth engine of the world

The Guangdong-Hong Kong-Macau Greater Bay Area (Greater Bay Area) is a visionary master plan announced by the Chinese Central Government to orchestrate and develop on the incredible potential of one of the country’s most productive geographical areas, and grow it into a world-class urban technological, innovation, medical, education and financial cluster. Hong Kong and Shenzhen, two vibrant cities in the Greater Bay Area, will act as powerful dual growth engines to connect China and the world to the exciting new opportunities.

Hong Kong and Shenzhen are paragons of globalisation and economic miracles brought about by an open, interconnected world. The two cities, on the two sides of the Shenzhen River, are thriving in their own ways. There are, indeed, more similarities than differences on their paths to prosperity. Both have had the best of two worlds and complement each other.

Shenzhen’s proximity to Hong Kong has helped it become the most successful of the five special economic zones created under the open door policy started in 1979; meanwhile, Hong Kong has ascended to new heights with its financial and professional services, thanks to the mainland’s explosive growth. In merely 40 years, Shenzhen's GDP has grown nearly 10,000-fold, while Hong Kong skyrocketed to become a global financial centre on par with London and New York.

Today, Shenzhen has the largest numbers of checkpoints, inbound/outbound passenger and vehicular flow in the mainland, and accounts for 10% of China’s total imports. Hong Kong-Shenzhen has one of the busiest traffic flows in the world, with a daily average of over 640,000 passenger trips crossed the border via land crossings each day in 2018. In 2019, Shenzhen has the largest number of international PCT patent applications in China for 16 consecutive years and accounting for 30 per cent of the national total, according to a white paper by the city’s authority . Its container port has the world’s third largest throughput, after Shanghai and Singapore.

I have had the privilege of witnessing the full course of the spectacular trajectories of Hong Kong and Shenzhen, as well as the deep and close relationship between the two cities in many areas: in trade, culture, tourism, and exchanges of information and talent, to name just a few. Their paths and destinies are intertwined.

Shenzhen has now taken up an expanded role – to lead the way in advancing China’s economic and financial reforms as well as to power the growth and prosperity of the Guangdong-Hong Kong-Macao Greater Bay Area (‘Greater Bay Area’). In a recent speech on the 40th anniversary of the special economic zone, President Xi called for a ‘greater miracle’ from Shenzhen, directing that the city become a hub of innovation and a model for the country. He affirmed that ‘all-embracing openness’ and reform, led by ‘ice-breaking thoughts’ would be the recipe for success.

As the mainland’s most open and tech-savvy city, this is a natural progression for Shenzhen.

Hong Kong indeed has an indispensable role to play in the Greater Bay Area, alongside Shenzhen. Hong Kong has always been a major source of foreign investment projects in Shenzhen. In the first three quarters of 2019, funding from Hong Kong accounted for about 80% of the total FDIs in Shenzhen. Thanks to its openness, free exchanges of information, capital and talents, rule of law, top-tier educational institutions, medical services and legal systems, world-beating efficiency as well connection with the world, ensured under the ‘One country, two systems’ arrangement, Hong Kong will continue to serve as an efficient and trusted intermediary between Shenzhen and the rest of the world. Together, the two cities will take the Greater Bay Area to world stage.

The land of opportunities and possibilities

The world-class bay area, with a total population of over 72 million and an estimated GDP of approximately US$1.7 trillion , is the land of opportunities and possibilities. It has a very diversified economy, and has a wealth of dynamic enterprises in fintech, technological innovation, auto-manufacturing, electronics and real estate.

The Greater Bay Area is one of the most productive and richest regions in China by per capita ranking, contributing nearly 12 per cent of GDP. Twenty-one companies from the Greater Bay Area have entered the 2020 Fortune Global 500 list , in which eight are based in Shenzhen and seven in Hong Kong.

The Central Government has formulated the 14th Five-Year Plenary Plan, which stresses global vision and promotes economic development with a new model featuring the dual domestic and international economic network complementing each other. This will enable Hong Kong to participate directly in China’s ‘dual circulation’ strategy, with domestic consumption as well as international trade and investment playing crucial roles.

As the only Common Law jurisdiction in China, Hong Kong enjoys dual advantages of both Common law and Civil Legal systems, which cements Hong Kong’s status to be the global offshore Renminbi (RMB) business hub and the centre for international legal and dispute resolution and mediation services in the Greater Bay Area and Asia Pacific. In addition, qualified legal practitioners in Hong Kong can soon obtain qualification to practise civil and commercial law in nine Greater Bay Area cities under the pilot scheme announced by the State Council earlier this month.

In June 2019, the Central Government introduced 16 policy measures which would benefit Hong Kong, facilitating deeper integration as well as broader cooperation and exchange of various sectors. The Central Government had further introduced several tax incentives to attract talents and investments to the Greater Bay Area, including Individual Income Tax exemption for subsidies of overseas high-level and executives working in sectors in urgent need of talents, and the Corporate Income Tax incentives applicable to designated free trade zones/ports in the Greater Bay Area.

One good example is Qianhai District in Shenzhen. The establishment of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone and the array of preferential policies has opened up new opportunities. In addition to facilitating property purchases by Hong Kong and granting tax concessions for Hong Kong people working in the Greater Bay Area, more favourable policies have been introduced such as housing quota for eligible Hong Kong enterprises and talents. At end-2019, Qianhai was home to 12,102 Hong Kong-funded companies, up 420 per cent from the 2015 figure of 2,313.

Combining finance and technology

Innovation and technology are driving the rapid transformation in financial services, with fintech reshaping the global financial landscape and the delivery model of financial services.

Shenzhen, widely known as the Silicon Valley of China, shines in entrepreneurship, innovation, traditional and next-generation technologies; meanwhile, Hong Kong is a compelling listing and fundraising venue with a long-established position as a global financial centre.

The path to the future is paved with technology, and this is the case for the financial sector. New technologies such as blockchain, cryptocurrency and virtual wallets are shaping the future of finance. The HKSAR Government is implementing measures to further lever the development of Fintech ecosystem, and the Hong Kong Monetary Authority has also issued eight licences for virtual banks. Hong Kong’s financial regulations and policies have caught up with the development of fintech. The combination of prowesses in these two sectors will make the Greater Bay Area a powerhouse of the global banking and financial industry.

Combining art and technology

In addition to finance, technology is revolutionising the arts scene and creative industries too. Art tech is the next mega trend, it will open up to new horizons and enormous opportunities through changing the way people access arts and wider applications of interactive media and new technologies.

The convergence of arts and technology spells fresh opportunities for the entire arts sector and the broader cultural and creative industries. It will enable Hong Kong’s world-class arts scene to keep pace with the world, and at the same time bring talents from around the globe.

Some of the sectors, like interactive media, software, computer games will benefit immediately from the use of applications like virtual reality, augmented reality, personalised art tour guides, creation of interactive and immerseive artwork that can be viewed online, gallery-style streaming, as well as artificial intelligence and machine learning. It will bring about a new dimension to the already vibrant creative industries.

In April 2019, five relaxation measures were introduced to further facilitate entry of Hong Kong films and film practitioners into the mainland market, including the removal of restriction on the number of Hong Kong people participating in mainland film productions, as well as waiving the fees for establishing Mainland-Hong Kong co-production projects, with a view to deepening exchanges between the two cities in creative industries and to developing Asia’s creative hub.

On a city level, the West Kowloon Cultural District, one of the world’s largest cultural complexes blending art, design, architecture, education, heritage, performance and public space, will cement Hong Kong’s position as a world-class culture hub, where local and international arts scene interact and collaborate. Opening in mid-2022, the Hong Kong Palace Museum will feature an exquisite collection of artefacts and master works from the Palace Museum, bringing national treasures to Hong Kong. Hong Kong shall leverage its expertise in creative industries to promote exchanges and soft power in the Greater Bay Area.

World-class health care and education

Hong Kong's healthcare system is consistently ranked the most efficient in the world, it took the top spot among the 56 economies covered in a study conducted by Bloomberg in 2018, thanks to the quality healthcare services and dedicated professionals. Since June 2019, eligible Hong Kong elders have been able to use health care vouchers to pay for outpatient services provided by designated clinics/departments of the University of Hong Kong-Shenzhen Hospital (HKU-SZ Hospital), as a facilitation measure for Hong Kong residents in the Greater Bay Area. The HKU-SZ Hospital, wholly invested by the Shenzhen Government and managed by the University of Hong Kong, is a good example of Hong Kong standards being implemented across the border.

Education and scientific research collaboration between Hong Kong and mainland has also entered a new phase. The HKSAR Government supports post-secondary institutions of Hong Kong to offer education services in the Greater Bay Area and to give full play to the characteristics of Hong Kong's higher education sector and their strength in terms of internationalisation. Following the establishment of Beijing Normal University-Hong Kong Baptist University United International College by the Hong Kong Baptist University and Beijing Normal University in Zhuhai in 2005, and the establishment of Chinese University of Hong Kong (Shenzhen) by the Chinese University of Hong Kong and Shenzhen University in 2014, the Hong Kong University of Science and Technology is in active preparation of its new campus in Guangzhou, which is expected to commence operation in September 2021.

A magnet for talents

Human capital holds the key to a productivity cluster, this is particularly important for knowledge-based industries such as innovation, technology and financial services. Governments in the Greater Bay Area are ramping up efforts to attract and nurture talents.

Shenzhen has one of the youngest and educated population in China with an average age of 32.1 . Its population is currently about 13.4 million , and is poised to grow to 15 million by 2035. Shenzhen has been a magnet for talents who want to jumpstart their careers or pursue their dreams, and it will continue to attract businesses and talents from throughout the country and the world, in particular those who appreciate cosmopolitan living.

In June 2019, HKSAR Government signed the Letter of Intent on Qualifications Framework Co-operation between Guangdong and Hong Kong with the Department of Education of the Guangdong Province, with an aim to explore the mutual recognition of credits in different categories of education and training in the Greater Bay Area, and the promotion of talent exchanges in the Greater Bay Area.

In November 2020, the Ministry of Education announced that the number of mainland higher education institutions participating in the Scheme for Admission of Hong Kong Students to Mainland Higher Education Institutions will increase to 127, providing Hong Kong students with multiple study pathways and opportunities to connect with the country's development. On the other hand, Hong Kong youths shall bring with them their international exposure and perspectives, fully leveraging the composite advantages of cities and facilitating in-depth integration within the first-class bay area.

Right on the doorstep of Hong Kong, there is a plan for an innovation and technology heartland in the Lok Mau Chau Loop, three times the size of the Hong Kong Science Park, to incubate start-ups and foster creativity in key industry areas, namely medical science and technology, big data and artificial intelligence, robotics, new materials, semiconductors, fintech as well as cultural and creative industries.

Hong Kong people, the quintessential global citizens, are well versed in international lingua franca, style and thinking. This can be put into good and practical use in the vast and dynamic marketplace of the Greater Bay Area, then onto the entire mainland. This is where talents receiving education overseas and international exposure will find themselves at home.

Support for a brighter future

Our youth can take advantage of the cross-border internship and exchange programmes supported by the Hong Kong Government. An average of 60,000 local young people each year are already benefiting from these schemes. Seed funding and experience sharing are crucial during start-up process. The HKSAR Government established the Youth Development Fund to help youngsters start their own business in the form of a matching subsidy in collaboration with non-governmental organisations. Last but not least, the Youth Development Commission rolled out two funding schemes to provide more relevant start-up support and incubation services to Hong Kong’s youth.

At the Greater Bay Area Homeland Youth Community Foundation, of which I serve as chairman, we seek to identify opportunities for our young people and prepare them for career opportunities in the Greater Bay Area and beyond. We have raised HK$100 million in secured commitments to further our young friends’ dreams. In the past year, the Foundation has approved funding for 38 projects supporting the Hong Kong youth.

We have worked primarily with non-governmental organisations to fund youth-related programmes grooming creative designers, computer animators, social-media influencers, new media vloggers, urban planners, baristas and entrepreneurs. We have also supported study and exchange tours in agriculture, art, education, technology, as well as sports and outdoor adventure. Some of the notable projects include For a Better Future – Hong Kong Youth Animator Development Programme, Dream Brewer – Pacific Coffee×HKCT @ GBA Entrepreneurship Training Programme, Me&MyCity: Vocational Education Development Programme for Hong Kong Youth, Travel ‘Vlogger’ New Media Training Project and Greater Bay Area Creative Design Talent Incubation Programme.

In addition, The Foundation has initiated programmes to empower young generations. The ‘For Our Future Scholarship’ provides assistance for students to pursue their academic aspirations. The ‘GenRobo’ programme, through collaboration with community partners, provides 2,000 placements for F1-F3 students from underprivileged families in the New Territories to learn AI and robotics, with the opportunities to advance study and enter a nation-wide competition.

In this enhanced confluence of endeavours, opportunities beckon our young people. Innovations, inspirations, and a launchpad to successful careers are all accessible. Our younger generation is full of creative ideas and global aspirations. Now, with the wind at their backs, it’s time for them to step forward and embark on a ground-breaking journey.

(This article was published with the permission of the author.)