Robert Lawrence Kuhn

In the early stages of China’s reform and opening-up policy, Guangdong Province and Hong Kong both flourished: Guangdong was the center of cheap-labor, low-cost manufacturing; Hong Kong was the financial and legal center of Asia, through which much of China’s international trade flowed and was financed. But times change and both models have passed into history. With rising labor costs – which is a good thing for China’s workers - Guangdong must upgrade its industry, go tech and high-tech. Hong Kong’s uniqueness has been eroded by the spectacular rise of Shanghai and Shenzhen as centers of trade and finance. That’s why the Guangdong-Hong Kong-Macau Greater Bay Area plan is critical. What’s the Master Plan - the Big Vision - of this vast regional coordination? How does such a massive plan work in practice, not only in theory? And where are the fault lines? What are the risks? Are the different political, legal and economic systems of the Greater Bay Area a facilitator or an impediment? In particular, could greater integration erode the sacrosanct “One Country, Two Systems” policy? Could integration degrade Hong Kong’s and Macau’s distinct way of life? There is still much to understand about the Greater Bay Area regional coordination.  

If the Guangdong-Hong Kong-Macau Greater Bay Area were an independent country, its GDP would rank almost in the top 10, certainly in the top 15, in the world, roughly the size of Russia’s or South Korea’s, larger than Australia’s. The Master Plan makes sense: because Guangdong and Hong Kong have each lost its unique role - low-cost producer, and center of trade and finance, respectively. New strategic positioning must be developed. The targets are clear: industrial transformation, moving up the value chain with technology, branding and service. Here, Hong Kong’s world-class competence and professionalism, combined with Guangdong’s capacity to mobilize resources, can make a powerful combination. To achieve global competitiveness, two keys are: building world-class infrastructure for connectivity, and attracting world-class talent to drive innovation — the former is easier than the latter. New industries must be supported: next generation IT, bio-tech, high-end equipment manufacturing, new materials, creative culture. There is more competition, especially from the Yangtze River Economic Belt centered around Shanghai. Moreover, in the past, Hong Kong took all of Chinese mainland as its market. Now it will have to think and focus more regionally. A potential challenge must be addressed: how might such central planning affect Hong Kong, which thrived because its market system has been one of the freest in the world, and its legal system, with absolute independence, one of the finest in the world. In China’s New Era, with economic development more complex, President Xi Jinping framed the five New Concepts of Development, of which “Coordination” is the second. The Greater Bay Area exemplifies Coordination. It is the test case to watch, to be… Closer To China.