Greater Bay Area Construction: Reforms Drive Development

An exclusive interview with Mr. Zhag Xiaoqiang, Executive Vice-Chairman and CEO of CCIEE

(China Center for International Economic Exchanges)

To promote the construction of the Guangdong-Hong Kong-Macao Greater Bay Area (Greater Bay Area) and city cluster is not only  necessary for self-adjustment and the realization of sustainable development but also the requirement for boosting China’s participation in the international competition and improving its global strength and influence.

In 2017, the Greater Bay Area has become one of the hottest terminologies of economic development.

During this year’s two sessions (CPPCC and NPC), the construction of the Greater Bay Area was included in the government work report, implying that it has officially become a national strategy.

In the report of the 12^th Party Congress of Guangdong province, the importance of the Greater Bay Area construction was once again stressed. The report made it clear that Guangdong should join hands with Hong Kong and Macao to take the advantages of pooled workforce, logistics, capital and information to develop a bay area economy of great influence and competitiveness. Again, the initiative of the Greater Bay Area was brought into the public’s eyes as an official document.

At the seminar of “Research on the Development and Planning of Guangdong-Hong Kong-Macao Greater Bay Area City Cluster”, held on May 3, the CCIEE research team, led by Zhang Xiaoqiang, Executive Vice-Chairman of CCIEE and former Vice Minister of the NDRC(National Development and Reform Commission),presented their research findings before the leaders of Guangdong.

How to make the Guangdong-Hong Kong-Macao Greater Bay Area a world’s leading bay area? In order to find the answer, the well-respected magazine “SouthChina” conducted an exclusive interview with Zhang Xiaoqiang.

SouthChina: The “Guangdong-Hong Kong-Macao Greater Bay Area” initiative is included in the government work report for the very first time this year, making it a national strategy, what is the crucial importance of it?

Zhang Xiaoqiang: From a national perspective, the initiative aimed at boosting coordinated development in all China, from the north to the south by implementing important measures.

Since the 18^th National Congress of the CPC (Communist Party of China), China’s central government has put forward several vital initiatives and strategies, such as The Belt and Road Initiative, the Beijing-Tianjin-Hebei Cooperation Strategy and the Yangtze River Economic Belt. The Belt and Road Initiative involves all the cities in China, the Beijing-Tianjin-Hebei Cooperation Strategy focuses on north China, in which the new special economic zone Xiong’an has been launched, while the Yangtze River Economic Belt concentrates on the middle and southern China. The construction of the Greater Bay Area in the south is part of China’s coordinated development plan.

The Greater Bay Area covers nice cities in Guangdong province, the Hong Kong Special Administrative Region, and the Macao Special Administrative Region. With an area of 56,000 square kilometers and a population of more than 60 million people, the hub’s economy valued at 1.4 trillion USD in 2016 and made it the 11^th largest economy in the world. Furthermore, the annual container throughout (TEU: 20-foot equivalent units) amounted 711.8 million and the annual passenger traffic at airports reached 186 million, more than any other famous bay areas in the world.

After more than 30 years’ development, Guangdong, Hong Kong and Macao have become the most open and dynamic economies in China. Therefore, they have the potential for becoming a world’s leading bay area and city cluster.

SouthChina: How will the construction of the Greater Bay Area impact the development of Guangdong, Hong Kong, Macao and even China as a whole?

Zhang Xiaoqiang: To promote the construction of the Greater Bay Area and city cluster is not only necessary for self-adjustment and the realization of sustainable development but also the requirement for boosting China’s participation in the international competition and improving its global competitiveness and influence.

Improving the coordination among Guangdong, Hong Kong and Macao will enable them to build a world-class city cluster similar to New York, London and Tokyo, create a new platform for international economic cooperation and help China to transform itself from a big economic nation to a strong economic power. Apart from that, the construction of the Greater Bay Area has the following three significant meanings.

First of all, it will benefit the implementation of the Belt and Road Initiative. The launching of the regional two-way opening up program with south Asia, south-east Asia and Eurasia will become an important support for building the Silk Road Economic Belt and the 21^st Century Maritime Silk Road.

Secondly, it will facilitate the formulation of high-standard rules for trade and investment, establish an open economy of international level, accumulate experience and explore new paths for a comprehensive and deepening reform and opening up.

Last but not least, this will help to explore new mechanism for regional cooperation under the “one country, two systems”, enlarge the development of Hong Kong and Macao and enhance their international competitiveness, so as to maintain long-term prosperity and stability in these regions. 

In summary, to promote the construction of the Greater Bay Area City Cluster is not only a vital strategy for regional reform and development but also an active approach to connect with the Belt and Road initiative and continue to carry forward the practice of “one country, two systems”.

SouthChina: What are the similarities and differences between Guangdong-Hong Kong-Macao Greater Bay Area and other world’s leading bay areas in San Francisco, Tokyo and other cities? 

Zhang Xiaoqiang: Bay area economy is a special economic pattern formed by harbor-based city cluster or city belt and has become an increasingly mature regional economic model.

Globally, bay area economy is usually featured with a rapid growing economy, cluster of innovation resources, excellent living environment, great infrastructure and well-defined regional development pattern. Many of the bay areas play a leading role in technological innovation and modern services development in their countries.

Comparing the economic size, living environment, infrastructure, regional pattern and city cluster’s competitiveness of the Greater Bay Area with other world-class bay areas, the Greater Bay Area certainly has the potential to become one of the world’s leading bay areas. Presently, the Greater Bay Area is still in the stage of preliminary development and thus has a lot of room for further development.     

SouthChina: How can we make the best use of the advantages of Hong Kong and Macao for the construction of the Greater Bay Area?

Zhang Xiaoqiang: The construction of the Greater Bay Area is interrelated with other projects such as the Pan-Pearl River Cooperation, Guangdong-Hong Kong-Macao Cooperation and Pearl River Delta Integration. In my viewpoint, the Greater Bay Area can be seen as an upgrading of regional cooperation and continuous deepening of the Guangdong-Hong Kong-Macao Cooperation.

The Guangdong-Hong Kong-Macao Cooperation has been one of China’s national strategies since a long time ago. Under the frameworks such as “The Mainland and Hong Kong Closer Partnership Agreement (CEPA)” and “The Mainland and Macao Closer Partnership Agreement (CEPA)”, Guangdong, Macao and Hong Kong have formed multilateral and all-round cooperation. Furthermore, the Pearl River Delta integration has made continuous progress since the launching of the “The Outline of the Plan for Reform and Development of Pearl River Delta (2008-2020)”.

As the Greater Bay Area begins to develop, the Pearl River Delta integration will be elevated to a higher level, the Guangdong-Hong Kong-Macao cooperation will enter into a new stage and the coordinated development in these areas will be smoother.

The central government’s ambition of making the Greater Bay Area a world-class city cluster reflects its high expectation of these areas, hoping that the city cluster will lead the development in the east, west and north of Guangdong and eventually, the pan-pearl river delta as a whole. 

SouthChina: China Center for International Economic Exchanges, as a national high-end think tank, participated in the planning of Greater Bay Area. In your opinion, how should the construction of the Greater Bay Area be implemented?  

Zhang Xiaoqiang: In essence, the bay area should be constructed according to the requirements of the third plenary session of the 18th CPC central committee, namely, promoting comprehensive and deepening reform and making them a strong impetus to development. At the same time, we should accelerate the building of an open economic system and push reform and development through further opening up.

Cooperation is the theme of the Greater Bay Area and therefore, we should take the following actions while implementing the five development concepts of innovation, coordination, green, open and sharing. On one hand, we must adhere to the principles of cooperative development, joint construction and sharing, mutual benefit and give full play to the complementarities of the “one country, two systems”. On the other hand, we should conform to the basic development law of the Greater Bay Area, innovate cooperation mechanism, and promote all-round cooperation in the areas of economy, society and culture so as to build a world-class bay area and city cluster.   

SouthChina: The Greater Bay Area involves nine cities in Guangdong, Hong Kong and Macao, how should they position themselves, connect with each other while implementing differentiate development strategy?

Zhang Xiaoqiang: The core of the Greater Bay Area includes Hong Kong, Macao, Guangzhou and Shenzhen.

The role of super liaison, played by Hong Kong, is irreplaceable. As an international free port, Hong Kong has great advantages in business facilitation, international talent and especially, its status of an international financial center will help to promote the RMB internationalization. We should make the best use of these advantages.

The leisure and recreation-oriented economy of Macao is fairly small, nonetheless, Macao could aim to be the world’s leading tourism and leisure center and a platform for business cooperation between China and other Portuguese-speaking countries.

As a center-city of China, Guangzhou is the largest transportation hub and commercial center within Guangdong province and thus, it has great influence on the development of its neighboring cities.

Reform and innovation are the two biggest advantages of Shenzhen, which is bound to play a leading role in technological, culture and system innovation during the construction of the Greater Bay Area.

Overall, we should maximize the comparative advantage of each city, focus on the optimization of the regional division of labor, advance comprehensive and deepening cooperation within the Greater Bay Area and jointly foster new international competitiveness.

SouthChina: What are the key areas and difficulties of the construction? How to overcome them?

Zhang Xiaoqiang: Whether or not the personnel, logistics, capital flow, information and other production factors can flow freely and efficiently will a difficult yet crucial task for successful construction. For example, the central government has released many policies since the launching of the CEPA, but many problems occurred during local implementation of these policies.

To resolve the problems mentioned above, the government needs to concentrate on institutional innovation. Under the precondition of mutual benefit, the cities and regions involved in the construction should deepen cooperation, eliminate the boundary shielding effect of different systems, maximize the benefits of clustering effect, division of labor, coordination and economies of scale to form a regional community of common interest, maximize its interest and quicken the pace of building a world-class bay area.