The Future of Hong Kong and the GBA on the 25th Anniversary of the SAR
Jorge Costa Oliveira
Last June, the Portugal-Hong Kong Chamber of Commerce and Industry and two other Hong Kong associations organized a seminar in Lisbon commemorating the 25th anniversary of the Hong Kong Special Administrative Region (SAR) and its future. The seminar focused on the fact that the SAR is one of the flagship cities of the Greater Bay Area (GBA).
The GBA is a major megalopolis that the Chinese government is creating. It spans the Hong Kong and Macao SAR and nine urban areas in Guangdong province, with a special emphasis on Guangzhou and Shenzhen. It has a total area of approximately 56,100 square kilometers, a population of 86 million and an overall GDP of EUR1.587 billion (slightly higher than that of Russia). The GBA was the first megalopolis to have an approved “Development Plan” that provides the objectives of the mega metropolitan area and the role of each of its urban areas.
More than 20 years after the People’ s Republic of China reassumed sovereignty over Hong Kong, the SAR has retained its economic strength and key economic characteristics – being an international business city, a free port with an almost total absence of customs tariffs, free movement of capital, low taxation, a gateway to China in numerous sectors (catalyzed by CEPA, a comprehensive free trade agreement with the Mainland), a major trading center, a major port and maritime trade center, a major hub for civil aviation – in the Far East and worldwide – and the most important financial hub in Asia.
Additionally, the creation of the GBA will increase and catalyze Hong Kong’s potential. For one, it will be easier to integrate distribution networks in the Hong Kong SAR with the distribution networks of the main urban areas of Guangdong. Professional practice is also facilitated in the whole GBA for liberal professionals from Hong Kong (and Macau). Given the large pool of skilled professionals in Hong Kong, businesses and liberal professionals in Hong Kong are expected to benefit from this facility.
One of the major goals underlying the establishment of the GBA is the creation of a large international financial hub, with new financial markets in several urban areas. Finance companies and professionals in this sector in Hong Kong will greatly benefit from this objective. However, many Chinese and foreign businesses will take the opportunity to raise capital and obtain funding in these financial centers.
It is important to closely examine the evolution of the GBA, from the outset as an integrated market and with a dimension that is more compatible with the scale of companies from Portugal and other small European countries. On the other hand, the GBA will become one of the main areas to set up financing for business projects in Portuguese-speaking countries, especially when they are in partnership with Chinese companies. Lastly, the interest of several Guangdong companies, especially state-owned enterprises and provincial funds, in their internationalization and in international partnerships, opens up very interesting prospects for companies that know how to position themselves and find the right channels to do so.
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