A ‘GOLD STAR’ ON CHINA’S ECONOMIC LANDSCAPE

Shen Xiaoning

On July 1， 2017， Chinese PresidentXi Jinping witnessed the signingof the Framework Agreementon Deepening Guangdong-HongKong-Macao Cooperation inthe Development of the GreaterBay Area （GBA） among thegovernments of GuangdongProvince， Hong Kong SpecialAdministrative Region （SAR） andMacao SAR. Construction of theGBA started based on“one country， twosystems， three customs territories， and threecurrencies，” and was planned to cover ninecities in Guangdong， including Guangzhouand Shenzhen， as well as the Hong Kong andMacao SARs.

Since then， a world-class bay area and citycluster has been under construction acrossabout 56，000 square kilometers. It is notonly a national strategy of China’s reformand opening-up in the new era， but also apioneering exploration of regional economicdevelopment at a global scale.

Blazing a New Trail

Innovation is key to the success of theGBA. On November 12， 2018， President Xicommented on the construction of the GBAduring a meeting with a Hong Kong-Macao delegation visiting Beijing to participate in celebrations for the 40th anniversary of reform and opening-up. “We will continue to encourage bold trials and experiments to blaze a new trail in this effort，” he said.

During an inspection tour of Guangdong in October 2020， Xi gave further instructions on achieving innovative breakthroughs in the construction of the GBA， urging the province to “advance reform and opening-up with greater courage and from a higher starting point” and “strive to take the lead in the country and create new splendor on the new journey of building a modern socialist country in all respects.”

During construction of the GBA， Guangdong Province has launchedseveral major projects. In October2020， Shenzhen began to implement acomprehensive pilot reform plan. More than half of 40 tasks on the first list have been accomplished. As ofJuly 2021，Guangzhou had adopted the 144-hour（6 days） transit visa exemption policyfor foreign travelers at Baiyun Airport，and 24/7， year-round customs clearance for imports and exports was available at Nansha， Huangpu， and other ports.

On October 16， 2021， 27 hours ofcontinuous work left nearly half of theunderwater tunnel of the Shenzhen-Zhongshan Cross-Sea Passage installed. The 24-kilometer-long passage，scheduled to open to traffic in 2024， isanother mega project of the GBA after??? the Hong Kong-Zhuhai-Macao Bridgeand the Guangzhou-Shenzhen-HongKong High-Speed Railway. Its openingwill cut the drive time from Shenzhen??? to Zhongshan down to only 30 minutes， which will upgrade the GBA’s current“one-hour living circle”to a“half-hour living circle，”further enhancingconvenient transportation in the area.

“As the vanguard of the country’sreform and opening-up， Guangdong isaccelerating construction of a platform for deepening reform comprehensively and providing strategic support forthe new development paradigm，”commented Chen Guanghan， chiefexpert at the Institute of Guangdong，Hong Kong， and Macao DevelopmentStudies at Sun Yat-sen University.

The Guangdong-Macao in-depthcooperation zone in Hengqin， anisland located in the city of Zhuhai，Guangdong Province， covers about 106 square kilometers. So far， the zone has incubated more than 600 innovation and entrepreneurship projects fromMacao and built a demonstration basewith the University of Macau andthe Macau University of Science andTechnology to congregate enterprises，universities， and research institutes.All four key state laboratories in Macao have set up branches in the zone.

Ho Iat Seng， chief executive of theMacao SAR， said in his Policy Addressfor the Fiscal Year 2021 to the Legislative Assembly that Macao would followthe central government’s plan to buildan in-depth cooperation zone with anopen and innovative mind to optimizethe advantages of“one country， twosystems，”comply with internationalrules， promote diversification ofMacao’s economy， and serve thecountry’s opening-up.

In her Policy Address at theLegislative Council in October 2021，Carrie Lam Cheng Yuet-ngor， chiefexecutive of the Hong Kong SAR，introduced a proposal to developHong Kong’s northern part into aNorthern Metropolis to share the fruits of complementarity in the respectivestrengths of Hong Kong and Shenzhenas well as their integrated development. This Northern Metropolis would bedeveloped as an international I&T hubwith a unique metropolitan landscapemarked with“Urban-Rural Integrationand Co-existence of Developmentand Conservation，”while the HarbourMetropolis supporting Hong Kong’sstatus as an international financialcenter would be expanded to includethe reclaimed land of the Kau Yi

Chau Artificial Islands under theLantau Tomorrow Vision. The twin downtowns in the north and southof Hong Kong would provide massiveland and enhance the spatial layout ofHong Kong. These two metropolises，spearheading their respective economic engines and complementing each other， will likely drive the future development of Hong Kong.

“The project sends a strong signalthat Hong Kong will be integrated intothe overall development of the country，”commented Liang Haiming， Hong Kongeconomist and president of the ChinaSilk Road iValley Research Institute.

Connecting GBA with RCEP

According to statistics from China’sGeneral Administration of Customs，since the entry into force of the Regional Comprehensive Economic Partnership（RCEP） agreement at the beginning ofthis year， China’s imports and exportswith the other 14 RCEP member statesin the first quarter of this year increased by 6.9 percent over the same periodlast year， accounting for 30.4 percent ofChina’s total foreign trade in the sameperiod.

Before the agreement came intoeffect， the GBA already began topinpoint its position in the RCEPframework. On November 30， 2021，the 2021 GBA Conference took place inHong Kong， themed“Embracing NewOpportunities： Connecting GBA withRCEP.” It aimed to explore RCEP business opportunities for the GBA. Leung Chun- ying， vice-chairman of the NationalCommittee of the Chinese People’sPolitical Consultative Conference（CPPCC） and chief convener of the Hong Kong Coalition， founded in May 2020to“get Hong Kong start again，” said atthe conference that the signing of theRCEP agreement would bring HongKong a new growth engine to facilitatecooperation with mainland cities in the GBA.“As one of the largest global tradehubs for both goods and services， Hong Kong deserves a reputation as a‘superconnector’，” he said.

Statistics show that after the RCEPagreement came into effect， HongKong’s trade in goods and services withrelevant countries accounted for nearly 60 percent of its total foreign trade.Hong Kong also formally applied to join the RCEP in February of this year.

“Joining the RCEP will inject newimpetus into Hong Kong’s foreigntrade and cooperation，” said VictorFung， chairman of the Hong Kong-headquartered Fung Group and member of the board of the Boao Forum for Asia（BFA）， at the BFA annual conference onApril 20.“As a regional financial centerand trade center， Hong Kong can playa coordinating and integrating role inserving the greater economy，” said Fung.

As an important piece of the GBA， Guangdong has also shared the

“RCEP dividend” in terms of high-quality opening-up. In less than amonth after the agreement came intoeffect， the provincial customs issueda total of 22，000 RCEP certificates oforigin， which has not only helpedChinese enterprises enjoy import tariffreductions of US$430，000， but alsofacilitated entry of foreign products into the Chinese market.

At the foreign trade ports inGuangdong， a vast array of“made inChina” chemical coatings， electronicproducts， clothing and leather goods， sports equipment， seasonings， foodand daily necessities were ready forshipment to other RCEP countries.At the same time， Japanese electricalappliances， New Zealand beef andmutton， Southeast Asian fruits andspices were being unloaded for theChinese market with significant tariff reductions.

“In the past， we could only applyfor the general certificate of origin toexport our products to Japan and didn’t get any tariff concessions，” said Xiao，section chief of customs clearanceat the Zhuhai Hongchang ElectronicMaterials Company.“Now， the RCEPcertificate gets us a more than 3 percent tariff reduction， which is really helping our company expand in the Japanesemarket.”

Panasonic Motor Zhuhai Companywas the first Japanese-investedenterprise to obtain RCEP preferentialcertificate of origin in Zhuhai. “Imports and exports are mutuallycomplementary，” said NieFangming，head of the company’s import andexport division.“Relevant arrangements have strengthened economiccooperation among East Asiancountries， which will help businessesreduce their operating expenses asmuch as possible.”

Shenzhen’s Yantian Port is a world-class shipping hub in the GBA. In thefirst quarter of this year， the import and export throughput of the port was about 10.91 million tons， worth 391.3 billionyuan （US$60.2 billion）， 29.46 billionyuan （US$4.53 billion） of which werethroughput with RCEP countries， up13.1 percent year on year. On March 23，Yantian Port’s first direct shipping lineto Cebu Port in the Philippines opened. It was the second Southeast Asianshipping line opened by Yantian Portafter the RCEP agreement came intoeffect. So far， the port has opened 23shipping lines to RCEP countries.

The GBA， almost at the geographiccenter of the RCEP region， is blessedwith natural advantages in termsof connecting China with ASEANcountries as well as Japan， South Korea， Australia， and New Zealand. This allowsthe area to become a RCEP regionallogistics distribution center， makinglocal cities more attractive in terms of trade and logistics.

Surbana Jurong Private Limited （SJ），a Singapore-based multidisciplinaryurban， infrastructure and management services consultancy firm， is one ofAsia’s largest firms of its kind. It has “taken root” in China for nearly 30 years. Two years ago， SJ opened an office inShenzhen. Lim Hong Kian， CEO of SJNorth Asia， said that his company made the strategic move mainly becauseShenzhen is one of the main enginesof economic development in the GBAthanks to its perfect policy supportingmechanisms and a big pool of talent.After the entry into force of the RCEPagreement， Lim is more confident. “Driven by the RCEP， the GBA， one of the most open and economically dynamicregions in China， will provide greaterdevelopment opportunities for moreinternational enterprises， especiallythose in Southeast Asia，” he said.

Looking to the future of the GBA，Cao Jinli， director of the Taiwan， HongKong and Macao Research Institute atthe Chinese Academy of InternationalTrade and Economic Cooperation under the Ministry of Commerce， thinks

that the GBA will continue to optimizethe international market layout andaccelerate balanced development ofimports and exports. She suggested theGBA seize the opportunities createdby the RCEP and continue to tap thepotential of traditional markets such as ASEAN， Japan， and South Korea， leverage Macao’s advantages in exploringnew markets with Portuguese-speaking countries， explore businessopportunities with the launch of theAfrican Continental Free Trade Area（AfCFTA）， and deepen trade cooperation with Latin American countries.

After only half a year since theRCEP agreement came into effect，construction of the GBA has been soencouraging that expectations are high for its future. Many are now looking tothe continuous development of China’s high-quality opening-up and the GBAto bring more pleasant surprises to Asia and the world.