Greater Bay Area a beneficiary as US-China tensions heat up, HSBC adviser says
- Domestic consumption in China will be an important factor in the country’s future growth, George Leung Siu-kay says
- Companies in the Greater Bay Area could benefit as the area becomes more integrated, he says
A trade war between the world’s two largest economies could speed the development of the Greater Bay Area as China focuses more on domestic consumption, an adviser to HSBC Asia-Pacific said Thursday.
Speaking on a panel at HSBC’s Greater Bay Area Exchange Forum, George Leung Siu-kay, an adviser to the deputy chairman and chief executive of the bank’s Asia-Pacific business, said that domestic consumption in China will be an important catalyst in the future – one that companies in Hong Kong, Macau and Guangdong province can tap as the area becomes more integrated.
“Likely the pace of development will move faster than expected because of this situation,” Leung said on Thursday.
Washington and Beijing have been locked in a tit-for-tat dispute over trade and China’s industrial policies since last year, with the US threatening to place tariffs of 25 per cent on nearly all goods exported from China. Beijing has responded with its own tariffs and the two countries remain far apart, after just weeks ago looking to be close to a deal.
Leung noted that it does not seem that trade tensions between the US and China will be resolved quickly and it could “take a long time before everything is back to normal”. As a result, the Greater Bay Area initiative will be even more important, he said.
The initiative is designed to increase ties between Hong Kong, Macau and nine cities in Guangdong province as part of an effort to improve economic development in the region and boost the flow of trade, capital and people in the area.
The Greater Bay Area had gross domestic product of US$1.6 trillion last year, making it larger than Australia, according to HSBC.
That could top US$4.6 trillion by 2030, Helen Wong, HSBC’s chief executive for Greater China, said.
“The Greater Bay Area as a whole can start to function as an integrated supply chain,” Wong said. “What might this look like? Research developed by a Hong Kong start-up working in partnership with a local university is used to create a prototype in Shenzhen. Once refined in the lab and financed by a private equity investor in Hong Kong, a final prototype is mass produced in a Dongguan factory. The finished products are then shipped domestically and overseas from Guangzhou.”
Patrick Nip, secretary for constitutional and mainland affairs of the Hong Kong government, said that the Greater Bay Area initiative could “inject new energy” into the city’s development and allow Hongkongers additional places to live and work.
He stressed that Hong Kong’s uniqueness and the “one country, two systems” concept of government is an important foundation of the Greater Bay Area.
“One country, two systems is one of the important elements of our success,” Nip said.
