Fostering the Flow of Factors of Production within the GBA

Tommy Yuen, Director for Constitutional and Mainland Affairs (Special Duties) and member of the Steering Committee for the Development of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), joined the Hong Kong government in 1985. He has served in various bureaus and departments and is now responsible for overseeing the government’s overall policy and strategy for promoting the development of the GBA, co-ordinating plans and formulating general publicity strategies. Yuen is also responsible for setting up the GBA Development Office.

“One Country, Two Systems”: Hong Kong’s Unique Edge

Hong Kong enjoys a unique dual advantage under the principle of “one country, two systems”. It is part of China but enjoys the privilege of having distinctive economic, legal and social systems from those of the mainland. As such, during Hong Kong’s participation in the development of the GBA, it must strictly observe the “one country, two systems” principle. Yuen believes this not only helps Hong Kong increase its own competitiveness but also attracts overseas companies and talent to the region. Indeed, Hong Kong’s biggest appeal to overseas companies and talent lies in “one country, two systems”, which covers aspects such as our social systems, values, a legal system underpinned by the Basic Law and the common law, and an independent judiciary. These are the keys to Hong Kong being so well-connected with the international (business) community.

Hong Kong’s international qualities are manifested in many ways, including the government’s cleanliness and resilience to new ideas, transparency of social policies, freedom of the economic system, free flow of information and free movement of persons, receptiveness towards new ideas, a robust business environment and efficiency. International companies are attracted to do business in Hong Kong mainly because it is an important bridge connecting the mainland and the rest of the world. To overseas investors, with its excellent geographical location and proximity to Mainland China, Hong Kong serves as the “gateway” to the vast mainland market and offers them convenient business opportunities. With more investors and traders gather in the city whereby a “critical mass” was built, a more vibrant business ecosystem is created. For example, as the world’s largest offshore renminbi settlement centre, many professional and trade services providers are attracted to set up subsidiaries in Hong Kong. This has enriched the economic environment of Hong Kong and increased the breadth and depth of its market and products.

As an international business hub, Hong Kong could share its experience with other GBA cities and help strengthen their ties with global markets. Yuen hoped that through the development of the GBA, the regulations and practices of the municipalities could better integrate and benchmark with the international community.

Factors of Production, Innovation and Technology

Yuen said co-ordinated development among GBA cities is of primary importance. Looking to the future, the SAR would strive for breakthroughs in the following areas over the next five years. First, strengthen the free flow and connectivity of production, including factors such as talent, capital and goods. Second, bolster the development of innovation and technology to encourage the launch of more research projects. Third, take forward the development of ecological civilisation – that is, promoting a sustainable production mode that not only seeks economic growth but also attends to ecological and environmental protection with a view to developing an international first-class bay area ideal for living, working and travelling.

The Hong Kong government has committed to substantial investment in the development of innovation and technology over the next five years, including a number of key projects. First, the government has set aside HK$20 billion for the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop, and hopes the first batch of land parcels could be available for bidding by 2021. Second, HK$10 billion has been allocated for the development of two innovation platforms at the Hong Kong Science Park, one for healthcare technology and the other for artificial intelligence and robotics, with a view to attracting leading international research institutions and relevant production chains, such as midstream and downstream enterprises. Third, Yuen pointed out that Guangdong had abundant provincial-level research funding and the Hong Kong government discussed with other GBA cities over the opening of funding channels mainland research funds can be channelled to Hong Kong to make better use of the resources for innovation and technology on both sides of the border. The first batch of funds has successfully been transmitted in August 2019.

Yuen said a key area that Hong Kong would like to further strengthen its position in the GBA is the flow of people and goods. In addition to the Hong Kong-Zhuhai-Macao Bridge and the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong High Speed Rail which have been opened to public since 2018, other cross-border infrastructure facilities are gradually coming into service. A highlight would be opening of cargo clearance facilities of the Liantang/Heung Yuen Wai Boundary Control Point in August 2020. Successful implementation of facilitation measures such as the “Single E-lock Scheme” and other innovative modes of customs clearance further facilitate logistics and passenger flow in the GBA.

HKSAR Government Promotes GBA Development in Six Areas

The development of the GBA covered a wide range of topics, individual government departments will draw up policies and strategies under their purviews and oversee follow-up work arising from them. Yuen introduced the six focus areas of the HKSAR Government – innovation and technology, financial services, youth development (such as employment, internship and entrepreneurship opportunities), environmental protection and ecological conservation, talent attraction, and smooth flow of key factors, especially people and goods.

Coordination and mutual complementarity is of great importance when taking forward the development of the GBA. Thus GBA cities do not share “identical” development strategies. Each city has its own policy priorities to strengthen its unique edges and creates synergy as a whole. The Hong Kong government will formulate policies and facilitation measures in accordance with the principle of “one country, two systems” so as to bring new development opportunities to different sectors of the community. By having breakthrough in market access policies such as mutual recognition of professional qualifications, more opportunities could be made available to professionals, investors and businesses from Hong Kong, hence attracting more capital and talents to the city.

To enhance the swift flow of passengers and factors of production, the Hong Kong government endeavours to introduce more convenient measures for overseas tourists travelling in the GBA, and look into further easing of traffic policies for the Hong Kong-Zhuhai-Macao Bridge. The Hong Kong government will also continue to maintain close contact with the government of Shenzhen on the development of boundary control points to meet the needs of future cross-border transport. In short, Hong Kong will expand its scope of development and generate new impetus for growth through active participation in the development of the GBA.

_{Company interview conducted by PricewaterhouseCoopers Advisory Services Limited}

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_{Note 2: This English version of the case study is translated by HKTDC based on the Traditional Chinese version prepared by PricewaterhouseCoopers Advisory Services Limited. Should there be any inconsistency or ambiguity between this English version and the Traditional Chinese version, the Traditional Chinese version shall prevail. PricewaterhouseCoopers Advisory Services Limited will not have or accept any liability, obligation or responsibility whatsoever for any loss, destruction or damage (including without limitation consequential loss, destruction or damage) however arising from or in respect of any use or misuse of or reliance on the English version of this case study.}