Hong Kong: Pulse of the Bay – Where Innovation Meets Connectivity
Pulse of the Bay
The 55-kilometer Hong Kong-Zhuhai-Macao Bridge, opened in October 2018, directly links three of southern China's most important cities by road for the first time and puts major cities in the Pearl River Delta within a three-hour commute of Hong Kong.
The bridge – the world's longest bridge-tunnel sea crossing – is more than an incredible feat of architecture and engineering. It is also a symbol of the closer links within the Guangdong-Hong Kong-Macao Greater Bay Area (Greater Bay Area).
All eyes are on Southern China. A key part of the Belt and Road Initiative, the Greater Bay Area development seeks to build a world-class city cluster in China's most economically diverse region.
Advanced manufacturing, aviation, green energy projects, innovation, shipping, trade, finance: a remarkably broad range of future-focused industries are driving economic output.
In 2018, the Guangdong-Hong Kong-Macao Greater Bay Area – including the two Special Administrative Regions of Hong Kong and Macao, and the nine municipalities in Guangdong Province – had a combined GDP of $1.64 trillion.
This accounts for 12 per cent of China's national economy, in an area that is home to only 5 per cent of its population (more than 71 million people).
The China Center for International Economic Exchanges estimates the Greater Bay Area's GDP will reach about $4.6 trillion by 2030, a figure that will eclipse the economic scale of both the Tokyo and New York bay areas ($3.2 trillion and $2.2 trillion, respectively).
Hong Kong, the most open and international of all the cities in the Greater Bay Area, is playing a pivotal role in not only the area's development, but also China's national development plan.
With the initiative comes the challenge of moving people, goods, money and data across 11 cities, three currencies and three legal systems. Hong Kong, China's global hub, is the open door that foreign and Chinese businesses need to unlock the full potential of the Greater Bay Area.
Authorities are already easing restrictions to galvanize trade and business. For example, the Chinese Central Government has introduced a measure to offset tax differentials for non-Mainland residents and no longer requiring Hong Kong, Macao and Taiwan residents to apply for work permits.
But for overseas companies eager but wary of investing in the Greater Bay Area at this stage, Hong Kong provides a healthy testing ground, with its stable common law system, free flow of information, vibrant business environment and long-standing strength as an international financial hub.
The recent arrival of GAC Motor International Co., Ltd, a wholly owned subsidiary of Guangzhou-based GAC Motor that serves as the parent company's platform for capital, talent pool and investment, shows that Hong Kong is off to a fast start.
Then there is the easy access to Shenzhen, the world-leading high-tech innovation center, which is home to giants of the industry like Tencent.
As the Greater Bay Area starts to take shape, its influence in China's Belt and Road Initiative is primed to expand. The Hong Kong SAR Government is already working to leverage its strengths as a shipping, aviation and trade hub to grow into its role as part of the Maritime Silk Road.
Hong Kong International Airport (HKIA) is consistently ranked as one of the best in the world for passengers, as well as the world's busiest air cargo hub. Now, Hong Kong is building a three-runway system that will be able to handle another 30 million passengers annually, equipping HKIA with the capacity to handle around 100 million passengers and 9 million tons of cargo by 2030.
Well-served by international shipping lines – with over 300 container liner services connecting 450 destinations around the world each week – and the Hong Kong-Zhuhai-Macao Bridge, Hong Kong is facilitating faster and easier transshipment of air-land and sea-land cargo across borders with the introduction of its Single E-Lock Scheme (SELS).
The system harnesses single e-lock technology and GPS devices to monitor goods during transport and streamline customs clearances, speeding up cargo flow across the supply chain. According to Zhuhai officials, it now takes less than three minutes for a truck passing through the clearance point to be examined and less than 10 seconds for other vehicles.
This plays into Hong Kong's role as a hub for investment in Belt and Road projects. According to PwC, the Belt and Road initiative has a total infrastructure investment need of about $5 trillion, creating opportunities for outbound capital projects and financing for international firms.
Multinational aerospace company Airbus is a prime example of the speed at which the Greater Bay Area is evolving, thanks in large part to the strength of its infrastructure. Airbus is shaping the future of offshore transportation, private and business aviation, and commercial passenger transport by delivering the first VIP version of its medium twin-engine ACH160 helicopter to Shenzhen Eastern GAC. The only general aviation company taking part in a pilot project that explores the easing of low-altitude airspace regulations in China, as well as one of the first mainland operators aiming to fly passengers between Hong Kong and the mainland, Shenzhen Eastern GAC expects to use the ACH160 to expand its private aviation offerings.
Southern China has never been so well-connected. With the Greater Bay Area development coming into focus, Hong Kong is providing the foothold businesses need to capitalize on all that it promises. Hong Kong is quickly becoming the beating heart of this world-class cluster.
