PWC SEES DIFFERENCE AS A DRIVING FORCE FOR COLLABORATION
Hong Kong, 28 February 2019 – The highly anticipated Development Plan for Guangdong-Hong Kong-Macao Greater Bay Area was announced this month, marking the official start to construction of the Greater Bay Area.
Commenting on the development, Thomas Leung, PwC China and Hong Kong Deputy Markets Leader, said, “Creating an international innovation and technology hub will be critical for the future development of the Greater Bay Area. Further, forming a people-oriented smart city cluster will require establishing a robust infrastructure network, upon which the thriving business environment can prosper, along with advancing a financial center to expand the capital pipeline.”
According to the Outline Development Plan, the goal for strategic positioning of the Guangdong-Hong Kong-Macao Greater Bay Area in the next 15 years is to develop into a globally influential international innovation and technology hub. Subsequently, by 2035, the Greater Bay Area should become an economic system with a mode of development predominantly supported by innovation. Economic and technological strengths are to increase substantially, while international competitiveness and influence will become further strengthened. To achieve the objectives, continued progress in R&D and innovation by various organisations such as enterprises, government and scientific research institutions, will be crucial. Additionally, the technology industry should focus on maintaining and capitalising on its superior resources. The Greater Bay Area needs to focus on creating industries in the pivotal areas of new-generation information technology, high-end equipment manufacturing as well as new materials, new energy and energy conservation, biomedical and technical services.
The Outline Development Plan supports that Guangdong, Hong Kong and Macao consider setting up special funds for joint innovation to support major scientific research projects. At the same time, Guangdong, Hong Kong and Macao will undertake in-depth cooperation in the areas of business incubation, technology finance, transformation of results, international technology transfer and technology services. PwC has suggested that with the help of top universities and knowledge reserves of Hong Kong, the level of innovation in the Greater Bay Area can be further upgraded to ensure the sustainable development of innovative technology industries and applications. In addition, it will be essential to attract and bring together talent with skills in cutting-edge and core technologies. With the 9+2 cities retaining their own characteristics, the acceleration of market integration and provision of accommodation, work, mobility, preferable taxation and conveniences in industries and other areas that have serious need of support – such as in the field of artificial intelligence – would help attract local and international talent. Hong Kong has certain advantages in the transformation of intellectual property in the field of innovation, especially in terms of quality certification and setting of industry standards. These experiences can be applied to the whole Greater Bay Area.
The Outline Development Plan sets out specific targets for building an international financial hub, developing financial industries with distinctive features, and promoting systematic interconnection of industries and financial markets. The strong link between the Hong Kong market and the mainland can be of great help in the development of the financial industry in the Greater Bay Area. PwC has recommended expanding cross-border investment options and facilitating people as well as capital flows. As there are differences in the regulatory and approval criteria for financial products between the mainland and Hong Kong, the launch of the development of the Greater Bay Area brings the prospect of new opportunities. Notably, we have the chance to review the differences and seek synergy between the two standards. We also see scope to promote financing platform by start-ups, build a green financial centre in the region, deepen links between financial markets and improve the supporting facilities to make Hong Kong a global shipping and aviation leasing centre.
Infrastructure is commonly regarded as the foundation of development, while network construction is a key to strengthen cooperation. The promotion of people flow and logistics would support capital and information flow. A fundamental characteristic of the Greater Bay Area is the connection among its cities. Although there are differences in maturity of infrastructure within the area, it is necessary to ensure all the cities in the region integrate smoothly, offering a truly convenient, and connected urban economic cluster. PwC has advocated for the infrastructure network in the Greater Bay Area to be interconnected, so that all cities gain the economic benefits from agglomeration, improve multimodal transport to achieve zero distance transfer, promote seamless connectivity and strengthen ties with strategic regions and major national strategies such as the Belt And Road Initiative.
While completing infrastructure is essential, the business environment serves as the intangible foundation for building a world-class city cluster, with technological innovation centers that have global influence and other key goals. PwC therefore, has suggested that the cities in the Greater Bay Area should strengthen communication with Hong Kong for improving the business environment there, and throughout the 9+2 city cluster in the short-term. Doing so can provide a model for the country, continuing at the forefront of China’s deepening reform and opening-up, while maintaining and enhancing the appeal of the Greater Bay Area to entrepreneurs, start-ups and talent to promote economic prosperity. Further, for a favourable business environment to be achieved, the support of talent is required. A good living environment, including medical care, education and low tax rate, are important conditions to attract the best people.
Smart City design is another important area of great promise for advancement with the development of the Greater Bay Area. Within the Greater Bay Area, there are different systems, laws, regulations and policies, including on information and privacy, which form limitations and challenges to cross-border living and business. Construction of a successful smart Greater Bay Area city cluster will need to take into account the overarching framework and comprehensive development direction of the entire region. At the same time, it should cater to the special circumstances of individual cities. Cities in the Greater Bay Area can further strengthen their infrastructure together by adopting differentiated development strategies while deepening cooperation. They also have the opportunity to establish a common platform for information exchange and data sharing in order to develop into a truly integrated smart region based on a people-oriented approach.
Thomas Leung, PwC China and Hong Kong Deputy Markets Leader, noted, “Challenges and opportunities coexist in the development of the Greater Bay Area. We should view the differences between cities as a driving force for collaboration. Enterprises should seize this opportunity to work together to develop and build an economically dynamic city cluster with global competitiveness.”