The Greater Bay Area (GBA) initiative, one of the Central Government’s national strategies, is gaining momentum and has become a buzzword among business communities in Hong Kong and beyond. At a Chamber roundtable on 27 May, Michael Enright, Managing Director at Enright, Scott & Associates, and Professor of Business and Economics at the University of Hong Kong, shared the findings of a nine-month study on the GBA, focusing on some of the likely development trajectories for the region as well as the opportunities for Hong Kong.
He described the likely economic trajectory as “pretty straightforward.” An inner ring – consisting of Hong Kong, Shenzhen, Dongguan, Guangzhou, Foshan, Zhongshan, Zhuhai and Macao – will contain the main administration, technology and advanced manufacturing, as well as high-end service centres. New infrastructure developments, such as the high-speed rail and bridge links, will make this inner ring reachable within one to two hours from any other city in the ring.
An outer ring, consisting of Zhaoqing, Huizhou and Jiangmen, will support the GBA development with its heavy industrial base. It will also benefit from spillovers from the inner ring.
With the region’s cities taking on a variety of complementary roles, the result is that the GBA represents huge opportunities for Hong Kong. Even with a fairly conservative projection, Enright said that the economic size of the GBA as a whole could reach US$3.6 trillion by 2035, more than doubling its current size of US$1.6 trillion. In 1997, Hong Kong’s GDP was three times that of the Pearl River Delta. Today, the ratio has fallen to one-third. Last year, Shenzhen passed Hong Kong in terms of GDP size, while Guangzhou will probably pass us this year.
However, “that is not a bad thing,” according to Enright. He said that the GBA will not only create a large consumer market for both goods and services, but will also result in a more diversified regional economy, allowing the market to become more sophisticated.
Enright also discussed the new roles of Hong Kong within the region. Hong Kong will have increasing opportunities in areas where it is traditionally strong, such as professional services, financial services, trade and logistics. But it will also develop new roles, for instance as an idea generator, data hub and R&D centre.
The study, titled “Creating the Greater Bay Area of the Future – Opportunities for Hong Kong,” was carried out under the auspices of the non-profit 2022 Foundation, chaired by Victor K Fung.