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Editorial | Shenzhen well placed to be ‘core engine’ of Greater Bay Area
- Under Xi Jinping’s blueprint, Hong Kong should make itself indispensable as fundraiser for the regional technological and economic powerhouse across the border
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Four decades on, a lot can still change in a short time in China’s continuing opening up and reform. Shenzhen’s sudden rise to ascendancy in the Greater Bay Area development vision attests to that. Last year Beijing confirmed Hong Kong as a key equal partner on the strength of its status as a finance, trade and transport hub. Now, ahead of a party plenum that will approve the country’s next five-year plan, President Xi Jinping has unveiled a new blueprint identifying the Shenzhen special economic zone as an “important core engine” of the bay area.
Xi said Shenzhen should promote the integration of Hong Kong and Macau, and the economic rules and mechanisms of the three places. Understandably this has given rise to concerns, following social unrest and the imposition of a national security law, that Hong Kong is being sidelined in the next stage of development of the world’s second-biggest economy. But it still leaves room for the city, as an international finance centre, to make itself indispensable as fundraiser for a regional technological and economic powerhouse.
Beijing has granted Shenzhen decision-making power over a wide range of policies, most notably more say in determining land use. When state ownership of all land has been a basic principle, this is a revolutionary reform. Land being a finite resource, efficient allocation of it is key to the goal of another economic miracle.
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Hong Kong's competitive edge questioned as Xi says Shenzhen is engine of China’s Greater Bay Area
Hong Kong's competitive edge questioned as Xi says Shenzhen is engine of China’s Greater Bay Area
Ultimately, the significance of such reforms may be whether they fulfil Xi’s hopes they can be replicated in the rest of the country. Shenzhen will also have more power to pass its own legislation in areas instrumental to the performance of its enhanced role, such as intellectual property and financial regulation. Only through more comprehensive legal protection that ensures a level playing field can Shenzhen hope to attract hi-tech and high-end talent.
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In terms of corporate and investment infrastructure, Shenzhen is well placed to create another miracle, with a stock market and the Shenzhen-Hong Kong Stock Connect for cross-border investment. It is now home to some of the world’s biggest companies, and the size of its economy surpassed Hong Kong’s for the first time in 2018. It is therefore established as the hi-tech hub for south China, complementing the Hangzhou e-commerce hub in the centre and Beijing’s innovation and research hub in the north. What sets it apart is that it now enjoys the promise of preferential policies and some of the autonomy enjoyed by Hong Kong.
American hostility has left China more dependent on its own innovation and technology. In that respect Hong Kong, as a finance centre, will have a key part to play in strengthening the role of the special economic zone as the core engine of the bay area. Hence Beijing’s push for cooperation between the two cities.
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