A massive bridge is set to transform southern China
China now boasts the world’s longest sea-crossing bridge. It’s both an impressive architectural feat and a potential catalyst for major economic change.
Spanning 55 kilometers (34 miles), the link connects former colonial outposts Hong Kong and Macau to other southern Chinese hubs across an area known as the Greater Bay Area.
Designed to last for at least 120 years and strong enough to withstand typhoons, the reported $20 billion construction is more than just a bridge. The connection involves a tunnel that dives underneath one of the world’s most congested sea cargo channels, three man-made islands and a new high-speed railway.
Officially opened in an October ceremony by Chinese President Xi Jinping, the focus is now on the potential economic impact of the new crossing to surrounding cities. CNBC goes on a journey from start to finish across the link, looking at what its impact will be for Hong Kong, Macau, Zhuhai and the whole Greater Bay Area.
The Greater Bay Area holds a population of over 65 million people — more than Canada and Australia’s populations combined. The 11 megacities in the region include both well-known names and up-and-coming metropolises: Hong Kong, Macau, Zhuhai, Jiangmen, Zhongshan, Foshan, Zhaoqing, Dongguan, Guangzhou, Huizhou and Shenzhen.
Fully integrating those hubs could create a rival to other major world economic and innovation centers such as Tokyo, New York and San Francisco.
All told, the Greater Bay Area has a gross domestic product (GDP) of $1.5 trillion. That’s already more than South Korea’s GDP of $1.4 trillion, and further integration could boost the region’s economic growth well beyond those levels.
The Greater Bay Area takes up only 0.6 percent of land and makes up 5 percent of the total population in China but accounts for 12 percent of the national GDP.
Foreign investment has played a role in the development of Guangdong, the southern Chinese province nearest to Hong Kong and Macau, which was once agriculturally focused. According to HSBC, investments from Hong Kong — considered a foreign entity due to its separate currency and investment rules — account for 65 percent of Guangdong’s GDP. The province has over a few decades become a manufacturing powerhouse — a potent symbol for the rise of China.
The Greater Bay Area is also home to some of the world’s biggest technology giants; telecommunications giant Huawei, conglomerate Tencent and drone manufacturer DJI are just a handful of the heavyweights based in the region.
Now, investors, government officials and business leaders are hoping to see the region attract young entrepreneurs and truly rival Silicon Valley. To achieve that, investors have already started to pour in money to build new developments and, more ambitiously, brand new cities in the Greater Bay Area.
Nee Pai Chee, vice president at Sino-Singapore Guangzhou Knowledge City Investment and Development (SSGKC) is overseeing a collaboration between China and Singapore to help build a new city in the region, with the potential to house half a million people. He projected that the majority of occupants will come from outside the area over the next 20 years, attracted by new developments good enough to “live, work and play in.”
Nee expressed confidence that the Greater Bay Area will compete with the likes of Beijing, Shanghai and Singapore: “We have a lot of international colors in us, in this development. If they come here, we’re able to help them link not just with Singapore, but the U.S. and European countries.”
The global powerhouse of Hong Kong needs little introduction to international business travelers. Fittingly for a place historically seen as China’s gateway to the rest of the world, the bridge-tunnel starts near Hong Kong International Airport. Over 74 million passengers passed through the airport in the 12 months that ended this September, an increase of 4 percent from the prior year. Additional access to the airport by road and rail could bolster that number as international tourists look to reach Macau and southern parts of the mainland.
Hong Kong’s roughly $340 billion GDP dwarfs its neighboring cities and far exceeds developing countries such as Pakistan and Colombia. But that is only half the story: Hong Kong’s share of the Chinese economy has fallen from 18 percent in 1997 to 3 percent at the present day. Hong Kong’s entrepreneurs aren’t fazed, however.
Sources: Hong Kong Trade Development Council (HKTDC)
For one, Eric Gnock Fah, co-founder of travel tech start-up Klook, said the new bridge will create opportunities for travel experiences. He says Klook, which matches users with events and activities in Hong Kong, receives “a lot of requests” on finding ways to travel to Macau and back without boarding a boat.
“When (tourists) come to Hong Kong they would like to go to Macau, but say they don’t want to get on the boat as they might get seasick,” Gnock Fah told CNBC. “Now the bridge will be very convenient for them.”
A fleet of 200 double-decker buses and 100 standard buses were publicly unveiled on Oct. 11, giving commuters the option to ride a shuttle service. The convenience of traveling by car or bus could come at the cost of Hong Kong’s long-standing ferry companies crossing the region. Mainland authorities have indicated that they will keep toll prices as low as possible in support of bridge users. The Hong Kong-Zhuhai-Macau Bridge Authority has reportedly said that one trip by a car or a taxi would cost 150 yuan ($21), while a shuttle bus would pay 300 yuan in bridge tolls. Private bus firms serve the connecting route into mainland China, while public services are reserved only for the area under regulation by the Hong Kong’s Transport Department.
But it's not all good news for bus firms. Eternal East Cross-Border Coach Management, a private cross-border bus company, told the South China Morning Post that it could lose 30 percent of existing passengers to another part of the Hong Kong-Macau-Zhuhai connection project; high speed rail.
An $11 billion rail project, with new bullet trains heading to Shenzhen and Beijing, has been promised to be faster than previous rail links. The Vibrant Express, otherwise known as MTR CRH380A, officially opened to the public on Sept. 10 and spans 26 kilometers (16 miles). Joint immigration checkpoints take place in Hong Kong’s West Kowloon train station, meaning part of the building falls under Chinese law.
Macau has been at the junction of cultures for centuries. Take a trip there and you’ll find myriad influences found in everyday delicacies such as egg tarts, which point to an era when Portugal ruled the territory. Dubbed China’s answer to Las Vegas, modern day Macau attracts attention for its casinos and resorts. Home to over 600,000 people, the so-called special administrative region is the only place in China where gambling is legal. Gaming revenue is said to be five times higher than in Las Vegas. But it’s not just the luxury resorts and the famous Cotai Strip that could benefit from a greater number of visitors.
The new bridge connecting Macau to Hong Kong International Airport could help smaller, local businesses thrive in Taipa Village, the old part of town preserved by the government.
Sources: Hong Kong Trade Development Council (HKTDC)
“Hong Kong is the second-biggest market for Macau,” Pamela Chan, head of marketing at Taipa Village, told CNBC. Visitors traveling to Hong Kong, she said, are more likely to consider a trip to Macau, especially because it will be within a 40-minute reach as opposed to a four-and-a-half hour round-trip journey.
“We are confident that we can capture more Hong Kong visitors after the bridge has opened,” she said.
While tourist boards eye opportunity, optimism about property prices is a little more muted. Alex Cheng, the general manager of estate agent Ambiente Properties, said the opening of the Hong Kong-Macau-Zhuhai bridge may well increase house prices, but only moderately. Local housing policy could prove to be a barrier.
“In the last two to three years the Macau Special Administrative Region (SAR) Government has levied special stamp duties,” Cheng told Macau News Agency. “If you don’t hold a Macau identity card you have to pay 10 percent extra.” Additionally, barriers such as Macau’s 5 percent stamp duty, a levy payable by anyone buying property, on top of taxes for second and third homes could keep property value increases at a modest rate. Still, even a 5 percent rise is expected to close the gap with Hong Kong’s famously pricy property market.
The next stop before heading back to the Hong Kong airport is Zhuhai. One of China’s first special economic zones, this city of 1.6 million people borders Macau and is known for its duty-free shopping.
It also boasts the 11th most popular amusement park in the world. Chimelong Ocean Kingdom saw nearly 9.8 million visitors in 2017, besting the likes of Disneyland Paris. Opened only in 2014, the park has rapidly expanded. Ocean Kingdom Manager Paul Yuen said he hopes to double his visitors in just three years and thinks the new bridge will bring in a fresh, international audience. His eyes are set on foreign travelers coming from Hong Kong throughout the year.
Zhuhai’s Chimelong Ocean Kingdom is the world’s 11th most popular amusement park. It saw 9.8 million visitors in 2017, more than Disneyland Paris (9.7 million).
Sources: Hong Kong Trade Development Council (HKTDC)
Currently, over 80 percent of visitors to the park come from other parts of mainland China.
“We think that the bridge and the recent repositioning of the entire Hong Kong-Macau-Zhuhai bay concept will make a lot of difference,” Yuen told CNBC’s Uptin Saiidi.
A trip between HK International Airport and Zhuhai currently takes four hours and covers a distance of 200 kilometers. The new link may reduce that to just 45 minutes. The connection to a major international airport is also shaping the theme park’s staff policy and training methods.
“On the website we have Chinese and English right now, but for staffing we still need to work out something so that our staff will realize the culture of the international guests coming in and how to communicate with them,” added Yuen. ”I believe we’ll work out this part.”
Optimism about the new regional connection is shared by many businesses in the Greater Bay Area, but some have voiced skepticism about how much use the bridge will see.
For their part, Chinese officials are hoping the high-speed rail link will push the populations’ integration. Government estimates project that the train will have 95,000 daily riders by 2021.
Still, it remains to be seen whether that and other elements of the Greater Bay Area project translate into an economic boom in the region. Typically, however, increased interaction means more economic growth, and Citi consumer sector analyst Tiffany Feng said in a recent report that the plan "should further enhance the flow of people, along with the movement of goods and services, capital and information within the region."
Either way, the new connections are set to drive forward China’s grand vision for the region, further linking its distinct hubs into one engine for Chinese progress.
One of the first passengers to use the high-speed terminus in Hong Kong on his way to Shenzhen wore a t-shirt that read: “Life is like riding a bicycle. In order to keep your balance, you must keep moving.”
Design and code: Bryn Bache
Editor: Everett Rosenfeld
Video Producer Uptin Saiidi
Images: CNBC, Getty Images