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REGIONS ASIA-PACIFIC


SHENZHENHAS OUTSTANDING INVESTMENT PROSPECTS. IT HAS BEEN THE CENTRE OF MUCHOF THE INNOVATIONANDHIGH-TECH DEVELOPMENTOF THECOUNTRY


Strengthinnumbers I


CHINA HAS AMBITIONS TO INTEGRATE THE GUANGDONG- HONG KONG-MACAU AREA, BUT FACES CHALLENGES, WRITES TAHA AHMED


n 1978, China launched its eco- nomic policy of ‘reform and open- ing up’ that catalysed its develop-


ment into an economic powerhouse. A leading plank in this strategy was South China’s Pearl River Delta region, including Shenzhen – the country’s first special economic zone. The same region is now at the


centre of China’s blueprint for its Greater Bay Area, designed to inte- grate the special administrative


regions of Hong Kong andMacau with nine cit- ies in neighbouring Guangdong province. The Guangdong-Hong Kong-Macau Area


spans 56,000 square kilometres – around three times the size of California’s San Francisco Bay Area – and has a population of more than 72 million. Annual gross domestic product (GDP) is around $1700bn, which is comparable to that of the New York Metropolitan Area and Tokyo Bay Area, according to the census and sta- tistics department of Hong Kong. China aims to harness the collective


strengths of the region through a co-ordinated economic development, which differentiates the roles of the cities so they do not compete with each other. With an overall focus on tech- nology and innovation, Hong Kong will special- ise in finance, Macao in tourism and Shenzhen in technological development.


Financial focus The planis forHong Kong to consolidate its role as a financial centre, according to new policies unveiled in the ‘Opinions concerning financial support for the establishment of the Greater Bay Area’, released by the People’s Bank of China (the central bank) in May 2020. The new policies include offshore use of the


Chinese renminbi in Hong Kong– and Macau, allowing mainland China residents to open


56


cross-border accounts in Hong Kong and easing the financial integration of the three regions, which each use their own currency. The account system will function as a


“financial cross-border bridge” and “will help financial institutions to innovate their services and products”, Song Yuesheng, vice-chairman and chief executive of Hang Seng Bank China, told state-owned newswire China Daily. Another policy announced in the opinions


is the ‘insurance connect’, which allowscustom- ers who purchase insurance in Hong Kong to access claims services in mainland China, sup- porting the establishment of foreign-invested insurance companies in the mainland region. “The insurance connect will enable Hong


Kong insurers to provide services in the Greater Bay Area via an online platform,” says Sally Wan, CEO of AXA Hong Kong and Macau. “The market penetration rate of life insurance in the nine mainland cities was less than 5% in 2019. Weexpect 22 million households in the Greater Bay Area to need insurance plans in the next decade,meaning that the potential is huge.”


Cutting edge Shenzhen is at the forefront of China’s ambi- tions to develop an international innovation and technology bay area, as the city continues to transform from a manufacturing hub to an innovation centre. Reflective of this evolution, greenfield


investment projects into Shenzhen’s manufac- turing sector have decreased over the last dec- ade, whereas project numbers in research and development have risen to consecutive record- breaking years in 2018 and 2019, according to greenfield investmentmonitor fDi Markets. “Shenzhen has outstanding investment


prospects. It has been the centre ofmuch of the innovation and high-tech development of the country,” says Joe Ngai, managing partner at


www.fDiIntelligence.com August/September 2020


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