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Greater Bay Area

Four years to realise benefits of ‘Greater Bay Area’, Hong Kong told, but tax a stumbling block

City’s minister for mainland China affairs sets target of 2022 for success on ambitious plan to create economic hub to rival Silicon Valley

PUBLISHED : Monday, 16 July, 2018, 7:00am
UPDATED : Monday, 16 July, 2018, 9:09am

Four years. That’s all it will take before Hongkongers see the benefits of China’s “Greater Bay Area” project, according to the city’s minister for mainland affairs.

The optimistic assessment by Patrick Nip Tak-kuen was offered in an exclusive interview with the Post in which he set a 2022 target for delivering success on the ambitious plan to turn Hong Kong and 10 neighbouring cities into a financial and innovation powerhouse to rival Silicon Valley.

“The picture I can foresee is that between now and 2022, travelling, studying and working [in the region] will become more convenient [for Hongkongers]. The ultimate aim is to bring economic and social improvements ... by supplementing the strengths [of these 11 cities],” Nip said.

But while he was confident of the road ahead, Nip laid bare the content of debate between legislators in Hong Kong and central government officials over key issues such as tax incentives and subsidised housing.

He said Beijing “clearly understood” arguments from pro-establishment lawmakers that salary tax breaks for Hong Kong businesses moving to the mainland would provide a vital boost for the bay area.

However, he had reservations about building subsidised flats for Hongkongers across the border – another major proposal put forward by the city’s pro-establishment camp of politicians.

“I’ve heard the idea, but we need to consider the grounds for it, its objectives, and whether the timing is mature,” Nip said.

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The secretary for constitutional and mainland affairs also said he felt Hong Kong’s relationship with mainland China had improved following conflicts in recent years over everything from democratic development to milk powder. He said social and political tensions had eased since leader Carrie Lam Cheng Yuet-ngor took office in July last year.

The Greater Bay Area project, which covers 11 urban economies worth a total of US$1.58 trillion around southern China’s Pearl River Delta, has been endorsed by Beijing and is being overseen by the country’s vice-premier, Han Zheng.

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Integration would not mean Hong Kong deviating from the “one country, two systems” principle under which the city has been governed since its return to Chinese sovereignty in 1997, Nip said.

Under this governing formula Beijing has guaranteed the former colony “a high degree of autonomy”.

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Hong Kong lawmakers have said that to make the bay area project work, local businesspeople must be exempted from paying the mainland’s hefty salaries tax when stationed north of the border. Currently, Hongkongers spending more than 183 days a year on the mainland must pay the levy.

Nip said Beijing officials “clearly understood” these concerns, but that “the central government needs time to study the issue”.

“[They know] the difference in tax policy will undermine people’s incentive to travel,” he said.

On housing, Nip expressed reservations about proposals by lawmakers to build subsidised homes in mainland cities to address Hong Kong’s dire housing shortage. He questioned whether demand would be sufficient.

“We need to consider what proposals would foster social and economic progress in the bay area,” he said.

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Turning to Hong Kong-mainland relations, Nip was optimistic.

“The overall atmosphere in society has become more relaxed, and [political] conflicts have been less frequent,” he said.

In the past year Hong Kong has seen a number of young activists – including democracy campaigner Joshua Wong Chi-fung – given prison terms for breaking the law at protests urging Beijing to allow electoral reforms.

A poll recently released by the University of Hong Kong found more Hongkongers than a year ago felt proud of their identity as a Chinese citizen, but only one in six young people shared the sentiment.

Nip said his Constitutional and Mainland Affairs Bureau was planning to table a bill to the city’s legislature in October to make insulting the Chinese national anthem a criminal offence.

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The bureau had originally planned to introduce it this month before the Legislative Council’s summer recess, he said, but the drafting took longer than expected.

The bill is a local version of mainland legislation and will urge all schools in Hong Kong to teach pupils the words to March of the Volunteers. Many schools already do so.

Even international schools should include the anthem in their curriculums, Nip said.