On July 1, 2017, the National Development and Reform Commission of China (NDRC) and the governments of Guangdong Province, Hong Kong Special Administrative Region (SAR) and Macao SAR jointly signed the Agreement on Deepening the Cooperation between Guangdong, Hong Kong and Macao, marking the start of developing the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).

On February 18, 2019, China fully laid out the grand plan by unveiling the Outline Development Plan for the GBA with short-term plans for 2022 and a long-term outlook for 2035. Since then, the GBA, bearing witness to the spirit of the "One Country, Two Systems" principle, has become a new highlight of China's high-quality development.

July 1 marks not only the 22nd anniversary of Hong Kong's return to the motherland but also the two-year anniversary of the GBA development. Hong Kong has been making vigorous efforts to leverage its strengths in the process.

GBA injects impetus into Hong Kong's development

When asked about the potential influence of the GBA to Hong Kong's development, Carrie Lam Cheng Yuet-ngor, Chief Executive of the Hong Kong SAR, gave a firm and positive answer by saying that the region will inject new energy into the Hong Kong economy, and provide greater future opportunities for businesses, elites, and young people in particular, in an interview on March 4.

She believes that participating in the development of the GBA under "One Country, Two Systems" will help Hong Kong find new drivers for economic growth and focus more on research, transformation and incubation of scientific technologies, while setting production bases in mainland cities in the bay area.

The GBA, according to Lam, will entrench Hong Kong's status as a center of international finance, shipping, trade, aviation and innovation. The GBA will promote Hong Kong as the hub of offshore yuan business, global assets management and risk management as well as the international legal and dispute resolution service center in the Asia-Pacific region.

Chen Jiahe, chief strategist at Cinda Securities, echoed Lam's view, adding that the GBA helps specify Hong Kong's industrial structure and make it focus more on sectors where Hong Kong possesses comparative advantages.

Considering the huge economic potential of the GBA and Hong Kong's service-based industry structure, experts believe that Hong Kong's participation in the GBA represents an important opportunity to promote Hong Kong's advantages.

The GBA covers a total area of 56,000 square kilometers and had a combined population of about 70 million by the end of 2018. Though it covers only one percent of China's land territory, the region's gross domestic product (GDP) reached around 10 trillion yuan (1.48 trillion U.S. dollars) in 2017, accounting for 12 percent of the country's total GDP.

Moreover, according to estimates by the China Center for International Economic Exchanges, one of the country’s top think tanks, the total economic output of the GBA will be comparable to that of the Tokyo Bay Area by 2020. By 2030, its GDP is expected to amount to 30.4 trillion yuan (4.62 trillion U.S. dollars), surpassing the economic size of the Tokyo Bay Area (21.3 trillion yuan, 3.24 trillion U.S. dollars) and the New York Bay Area (14.4 trillion yuan, 2.18 trillion U.S. dollars), to become the world's largest bay area in terms of GDP.

From 'contact point' to 'participant'

The Outline Development Plan for the GBA positioned Hong Kong as one of the four core engines for regional development with the task of driving the development of surrounding areas. Lam viewed the promulgation of the plan as a new milestone and promised to work jointly with governments at all levels to advance the development of the GBA.

Since the signing of the agreement in 2017, Hong Kong has been participating actively in the development of the GBA and is transforming its role from a "contact point" to a "participant."

To ensure Hong Kong better coordinates and participates in the development of the GBA, Lam formed and chaired the Steering Committee for the Development of the Greater Bay Area. She will also set up a Greater Bay Area Development Office and appoint a commissioner to implement the relevant work, according to an official statement.

Economically, Hong Kong has invested 13 billion U.S. dollars in the GBA in the past two years with preferential tax policies adopted to cut capital gains tax and prevent double taxation so as to attract investment and business settlement.

Noticing Hong Kong's unique advantage as a global financial center and the biggest RMB clearing center, Lam also said funding platforms would be offered to tech and other innovation-oriented firms.

GBA forges closer ties between Hong Kong and the mainland

With Hong Kong's participation in the development of the GBA, closer ties between Hong Kong and the mainland have also been forged gradually.

The connection grew particularly strong after the completion of the Hong Kong section of an express rail link connecting the region with Guangzhou and Shenzhen, and the opening of the Hong Kong-Zhuhai-Macao Bridge last year.

Lam hailed the growing infrastructure links in the region for facilitating the development of the cluster, which puts major cities within an hour's distance of Hong Kong. 

"Now Hong Kong residents can arrive in Guangzhou in 45 minutes and Shenzhen in even less time," said the Hong Kong chief executive.

Apart from the infrastructure, the central government also offers preferential policies to support communication and exchanges within the region to promote the development of the GBA as well as the development of Hong Kong.

In fact, the central government has introduced several concrete measures since August 2017 to remove barriers that limit Hong Kong residents from studying, working and living in the mainland, while ensuring they can settle down and enjoy equal treatment when receiving higher education in the mainland.

Since September 2018, Hong Kong and Macao residents who meet relevant criteria can apply for residence permits. By February, more than 100,000 Hong Kong residents had applied for the permits, according to Lam.

Starting July 1, the fee for citizens' regular passports and mainland residents' travel passes for Hong Kong and Macao trips will be cut by 40 yuan (about 5.82 U.S. dollars) from 160 yuan to 120 yuan, and the fee for a travel pass to Hong Kong and Macao will be reduced from the current 80 yuan to 60 yuan, the National Immigration Administration (NIA) said in a statement.

This support helps accelerate the development of the GBA by facilitating exchanges, making business operations much easier within the cluster.

Overall, the GBA represents a regional development strategy featuring complementary advantages, coordinated development, mutual benefits and common prosperity. As Lam said, the region contains great potential and Hong Kong needs to grasp the opportunity and participate actively in the regional development to pursue prosperity and development.

(Cover: Hong Kong's Victoria Harbour, Hong Kong, China, September 3, 2018. /VCG Photo)