Hong Kong: Economic stronghold of the budding Bay Area

Rapid development of the dynamic Bay Area in southeastern China, a cluster of cities encompassing Hong Kong in the Pearl River Delta region, is set to power the country's economic progress in the 21^st Century.

The Bay Area covers the Special Administrative Regions of Hong Kong and Macao plus nine Mainland cities: Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing. These cities combined cover a population of some 66 million people (similar to that of the United Kingdom), and generate GDP of about US$1.36 trillion (comparable to that of Russia, and representing 12 per cent of China's total GDP). Analysts predict that by 2030 this 56,500sq/km Bay Area could surge to a mega-economy of US$3.6 trillion, a near-tripling of the region's current economic output.

With its potential for growth, the Bay Area has been compared to other successful bay area models, including Tokyo, San Francisco and New York. But China's version will leave its counterparts behind in terms of footprint, population, logistics and trade; it is already home to some of the busiest ports and airports in the world.

The Bay Area will give full play to Hong Kong's competitive advantages under the "One Country, Two Systems" formula. The city will cement its position as key international gateway to the upgraded Chinese economy, capitalizing on Hong Kong's strengths as the world's freest economy.

As a well-established global hub for finance, logistics and trade coupled with a transparent common law system, deep pool of professional services talent and unparalleled capacity for handling offshore Renminbi business (as the largest centre for Renminbi business outside the Mainland), Hong Kong is the world's gateway to the vast China market.

But the dynamic has changed in recent years. Once considered "The Factory of the World", southern China, and especially the Pearl River Delta region, is attracting international technology brands, investment and entrepreneurs while also serving as a springboard for Mainland enterprises to "go global". Through closer collaboration, the Bay Area stands to make significant gains and contributions related to China's new phase of strategic development.

At the heart of Hong Kong's success lies its high degree of autonomy, which is guaranteed under the "One Country, Two Systems" principle and enshrined in the city's constitutional document, the Basic Law. Characteristics such as Hong Kong's internationally compatible financial and legal systems and deep-rooted free-market culture are expected to filter through to the wider Bay Area.

With the introduction in 2004 of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), and subsequent enhancements to this free trade pact, Hong Kong already enjoys highly liberalised trade in goods and services with the Mainland. Two-way flows of goods, services and investment will only increase as the Bay Area evolves.

What's more, the Bay Area is also a strategic player in the wider Belt and Road Initiative, which aspires to strengthen infrastructure links and enhance trade, financial and cultural connectivity along Belt and Road routes stretching from Asia to Europe via the Middle East and Africa.

Of course, an undertaking of this scale involves a lot of investment and expertise, which again plays to Hong Kong's strengths.

In terms of physical connectivity, soon-to-be-completed projects include the Hong Kong-Zhuhai-Macao Bridge. As the name suggests, this mega-bridge will connect Hong Kong, Zhuhai and Macao, opening up new markets in the western Pearl River Delta region. Once operational, the bridge will reduce the travelling time between Zhuhai and Hong Kong International Airport to 45 minutes, down from a four-hour road trip at the moment.

Another addition to the transport infrastructure will be the 26km Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) connecting Hong Kong to the national high-speed rail network. The XRL will provide speedy rail services between Hong Kong and major Mainland cities. Government projections suggest the XRL will save passengers about 39 million hours of travelling time per year on average over a 50-year operation period. The railway is expected to begin operation from the third quarter of 2018.

At a time of intense competition between cities and economies in Asia, the Bay Area and the Belt and Road Initiative will help to keep Asia's world city on the fast track to new business opportunities.