South China Morning Post
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A general view of Shenzhen Bay Bridge, which connects Shenzhen to the Hong Kong Special Administrative Region. Photo: Roy Issa
Opinion
The View
by Richard Harris
The View
by Richard Harris

The Greater Bay Area is the right thing for Hong Kong and China – if it has all the right connections

  • If the Greater Bay Area has uniform pricing in key areas, a smart permit system and fast train links, it will be a benefit to all involved – Hong Kong included
Richard Harris
Richard Harris
Why you can trust SCMP
They were fine words from China’s State Council: build a “Greater Bay Area”. That’s easy to say – but not so easy to execute. But that’s the prerogative of the boss; lay down the vision and get everyone else to do the hard work. 
China is keen on grandiose schemes. It’s high-speed rail network is a wonder of the world and will keep China’s economy humming for the next 100 years. The “bridge to nowhere” was ill-conceived from the start; bridges are built to link to two underdeveloped places – not Hong Kong, Macau, Zhuhai and the South China Sea. They do say that half the money spent on infrastructure is wasted, you just don’t know which half.

The bay is an overwhelmingly good idea, even though there is no doubt that it is an effort to keep the Hong Kong powerhouse in check. We are the biggest and by far the richest economy in the bay with just over 10 per cent of the people; educated, trained and globally connected, we are a great resource for China.

China needs a closer Hong Kong as a gateway to the world – increasingly important as China battles a toxic reputation for protectionism and lack of copyright reputation. It certainly has overtones of political ingress by the “one country” into the Hong Kong system. Guangzhou, too, will be worried about closer links lifting Hong Kong to the top of the bay. Then again, the sovereign power comes from Beijing and we’d all better get used to it.

It works both ways. Hong Kong will only be useful as China’s gateway to the world if its current rule of law, free flow of information, relative freedom of speech and open capital account are preserved. Cut that and you cut the neck of the golden goose.

What’s in it for us? Parts of the Hong Kong economy can benefit from a little open competition. The bay has a vast population of educated, experienced, talent, with more hunger than our local employees. They can still live in China and work for Hong Kong companies but it will work better with more integration.

Conurbations around the world like London, New York and Tokyo have vast commuting links. The rich live in the city and the country and the middle class in the suburbs; Bedford, New Jersey and Takasaki. And a developing city needs the low-paid: the bay has cheaper property.

Here’s how Hong Kong property will benefit from Greater Bay Area

There are many systems, porous borders and economic dependencies that connect countries and territories around the world. Monaco and Geneva straddle borders with different tax rates and the economics of living in a more taxed neighbourhood can be worked out to make things easier for commuters.

Andorra is run by two princes – a Catalonian bishop and the French president – but has its own laws and government under their heads of state. Monaco is a sovereign principality that is not a member of the European Union but uses the euro. Monaco’s French border runs down the equivalent of Robinson Road – almost impossible to see except on a map. All have different systems within a closer economic union. It’s been done before.

Greater Bay Area integration is Hong Kong’s chance to repeat history
Closer economic ties are born not made. Traction on the bay’s success will depend on easy, small, transparent and permanent initiatives such as the “bay area permit”, promoted by Witman Hung, a Hong Kong deputy to the National People’s Congress. But it needs to be given to all bay residents, not just a favoured few party members.

It is true that 70 million people will want to come to Hong Kong, but the permit could limit excessive tourism while encouraging people to discover more about the other side of the bay. Some Hong Kong travellers might find they like to live on the mainland – even more so if property rights were made more secure and Google was allowed.

Another easy move would be to make smartphone costs the same throughout the bay area, something that has brought the continent of Europe together far more than the bullying European Commission. Consolidating transport tickets to allow travellers to arrive and go would be another cheap and easy move.

The devil’s in the detail to make Greater Bay Area a success

Somewhat more long-term (and costly) is the need to build fast commuter through-train links. Hong Kong will have to be connected by non-stop commuter lines through Shenzhen to Zhongshan, Foshan, Dongguan and Guangzhou. That needs to start now to meet the 2035 benchmark.

Hong Kong was originally established in 1841 as a gateway to China and the bay is a natural evolutionary process – but we can be sure the central government won’t go too far. The bay has too many economic advantages that Beijing does not. If the bay were truly successful, it would become a significant competitor to the capital. That could be an interesting conundrum for the State Council in 2035.

Richard Harris is chief executive of Port Shelter Investment and a veteran investment manager, banker, writer and broadcaster, and financial expert witness

This article appeared in the South China Morning Post print edition as: Making the ‘bay’ work
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