[Sponsored Article]

Economically, there’s never been a more exciting time to be part of the Guangdong-Hong Kong-Macao Greater Bay Area. Comprising nine municipalities within Guangdong Province, plus the Special Administrative Regions of Hong Kong and Macao (known as the 9+2 cities), the Greater Bay Area is both geographically larger and more populous than the world’s other major bay areas, and boasts faster GDP growth, more air traffic, and greater port container-throughput.

With the recently announced blueprint for transforming the Greater Bay Area into an economic powerhouse, DBS Bank  is hosting the inaugural DBS Greater Bay Area Conference in Shenzhen on April 3, to help customers explore how best to leverage the opportunities and unlock the true potential of what is expected to be the biggest bay area economy in the world.

DBS estimates that, with a combined GDP of US$1.5 trillion, the economic strength of the Greater Bay Area is roughly equal to that of the entire Russian economy. The Greater Bay Area, with its vast hinterland, may not yet be on a par with other bay areas, like the San Francisco Bay area, metropolitan New York and greater Tokyo, as far as per-capita GDP is concerned; however, according to the Chinese Government’s Outline Development Plan (the Plan), the development of the Greater Bay Area is now opening up on all fronts, with full speed ahead.

The Greater Bay Area already has fundamental conditions that favour its development as a world-class international city-cluster. It has a distinctive geographical advantage, robust economic strength, a high concentration of young innovators, a deep international mindset and solid cooperation among the cities in this region. It is also important to keep in mind that Guangdong has long been among the fastest growing regions of China, thanks to the province’s pioneering role in opening up the nation. Yet, under the Plan, there are signs of a new wave of stimuli to the Greater Bay Area economy, and this has already taken shape with closer integration and connectivity.

In view of the expected economic growth, as well as the accompanying vast social changes in the Greater Bay Area, DBS sees a great opportunity to accelerate its business. Leveraging its strengths in Hong Kong and China, as well as across the region, DBS is driving its strategy to be a leading foreign bank serving the onshore and offshore needs of customers seamlessly. To do so, DBS is focusing on companies and industries unique to the Greater Bay Area, such as technology hardware and home appliances, auto, as well as their supporting industries.

Says Sebastian Paredes, CEO of DBS Bank (Hong Kong): “For the next five years, the growth of our business in the Greater Bay Area will be double the growth expected for the group's Hong Kong and China units overall.”

The Plan outlines the future development of the Greater Bay Area that is “driven by poles (Hong Kong-Shenzhen, Guangzhou-Foshan, Macao-Zhuhai) and supported by axes”, aided by a rapid transport network which includes high-speed rails, state-of-the-art intercity railways and modern high-grade motorways.

From Hong Kong’s current perspective, this enhanced natural geographic connectivity within this booming region is best illustrated by the 36-kilometre long Hong Kong-Zhuhai-Macao Bridge, which has greatly improved transportation access to cities in the western Pearl River Delta region within a 3-hour commuting radius of the larger of the Special Administrative Regions - and with even closer access to Macao.

This western Pearl River Delta hinterland, according to DBS research report Understanding China: Greater Bay Area - A Capital/Labour/Tech Mega-hub, features labour costs that are generally 50 per cent lower than for such cities as Shenzhen and Guangzhou.

In addition, the efficient Express Rail Link connecting Hong Kong to Shenzhen, Guangzhou and beyond (to the 25,000-kilometre National High Speed Rail Network) means improved connectivity across the country's provinces.

With such modern transport, the Greater Bay Area is ready for further progress. The Plan is clear: the Greater Bay Area is to develop into an international technology hub. And so DBS is optimistic that the Greater Bay Area could eventually become Asia’s Silicon Valley - especially due to major government initiatives from Beijing, Guangdong and Hong Kong.

“The Greater Bay Area shares common successful factors with Silicon Valley in the United States,” DBS notes, citing several key points, including the vibrant presence of leading academic institutions, and guidance from the state, such as the China Manufacturing 2025 blueprint. There is also easy access to Hong Kong’s efficient and well-regulated capital market.

Regarding the need to nurture new talent, DBS believes “the establishment of the ‘Greater Bay Area Academician Alliance’ in Hong Kong could well be a good start to serve common goals of fostering technological innovation (in the space of big data, AI, and robotics advocated by the China Manufacturing 2025 campaign) and training new talent for the private sector”.

It is worth noting that the Chinese government aims to create a mega-hub using the competitive advantage of each specific city. For example, Shenzhen is expected to be the technological innovation hub; Hong Kong continue to be the hub for international finances, while Macao is to become  a world-class entertainment, meetings and recreational center.

Numerous development projects within the Greater Bay Area will likely have far-reaching consequences. A case in point is the determination to enhance the Greater Bay Area’s infrastructural connectivity, ranging from a modern comprehensive transport system, to information infrastructure, energy and secure water resources. In addition, the Greater Bay Area’s industrial system is set to be modernised, including the development of modern service industries.

In DBS research report Hong Kong - Core of the Greater Bay Area, eight sectors are identified under the financial and technology industries that will benefit Hong Kong, particularly due to the synergistic opportunities brought by the Greater Bay Area initiative. In the financial industry, these include asset and wealth management, new economy listings, green financing, offshore RMB business and cross-border capital flows. For the technology industry, DBS believes that Hong Kong can play a significant role in technology and innovation, smart city and information infrastructure, re-industrialisation, and as an intellectual property hub.

With all the considerable optimism and excitement surrounding the Greater Bay Area, the DBS Greater Bay Area Conference will bring together leading industry thought leaders, business luminaries and world-class academics, to help ensure customers and stakeholders are well prepared to take full advantage of the opportunities presented by what will become the Greatest Bay Area in the world.