Since the release of the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area (the Outline Development Plan) in February 2019, significant progress has been made in the development of the GBA. From the perspective of economic geography, the “9+2” city cluster has been at the forefront of China’s reform and opening-up, making it one of the most dynamic, open and internationalized regions in the country. In 2019, the GBA’s GDP was approximately 11.6 trillion yuan ($1.6 trillion). By 2022, it had exceeded 13 trillion yuan, surpassing that of Australia and South Korea, and approaching Italy’s. In 2022, the per capita GDP of the GBA exceeded $22,000, with the utilized foreign direct investment reaching nearly $170 billion.
From the perspective of policies and institutional arrangements, the advancement of the GBA represents substantial innovation in China’s regional development vision, policy regime and institutional practices. With the unique environment of “one country, two systems”, three customs territories, and three currencies, transforming the regional “institutional diversity” into “institutional advantages” is central to the GBA’s development. Over the past five years, guided by the Outline Development Plan, the GBA has explored and cultivated a multilevel, multidimensional system of policy experimentation, which respects and maintains the diversity of each city while creating new space for enhancing intercity connectivity and cooperation.
In terms of “hardware” infrastructure, the transportation network in the GBA has witnessed major improvements, leading to greater passenger and freight flows, laying a solid foundation for enhanced regional connectivity. For instance, in 2023, the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link achieved a record-breaking passenger volume of over 20 million. From full resumption of normal travel between the Chinese mainland and Hong Kong to the end of 2023, the number of passengers traveling from Shenzhen to the Hong Kong West Kowloon Station reached around 5.48 million, and the number of passengers traveling in the opposite direction reached around 5.16 million. In 2023, the Hong Kong-Zhuhai-Macao Bridge recorded over 16.3 million inbound and outbound passengers at the Zhuhai port, with Hong Kong and Macao residents accounting for approximately 61 percent of the total passenger flow. The Shenzhen-Zhongshan Link and the cross-boundary railways between Hong Kong and Shenzhen will further optimize the layout of the GBA’s transportation network and enhance the capacity of the “one-hour living circle”.
Against this context, strengthening intraregional connectivity with bold infrastructure investment and institutional innovation, reducing legal barriers and transaction costs, and enhancing the efficiency of cross-boundary capital allocation will be crucial for promoting the high-quality development of the GBA as a leading global economic hub in the 21st century
In terms of “software” infrastructure, the GBA has been actively exploring various forms of institutional innovation, bridging gaps in rules, regulations and governance mechanisms across different cities. It has established a series of major cooperative platforms for policy experimentation, including Qianhai, Hengqin, Nansha, and Hetao. This has facilitated breakthroughs in pilot programs to enhance connectivity in areas such as cross-boundary finance, technological innovation, education, legal cooperation, and professional qualification certification. Qianhai, Hengqin, Nansha and Hetao have different priorities and positioning, but all of them are at the forefront of exploring new modes of regional collaborative governance, building a more internationalized business environment, promoting technological innovation and opening-up. They are also expected to generate policy experiences that are replicable and scalable, providing new models and catalysts for broader policy learning and diffusion. Despite the substantial progress made in the GBA’s four major cooperative platforms, we are still at an early stage of overcoming existing intercity barriers and enhancing “software” connectivity for a larger-scale flow of talent, data and capital in the region. Cities in the GBA need to strengthen collaboration to plug the gaps and loopholes in the standards of their healthcare, education, taxation, customs arrangements and social safety net.
The GBA is situated at the interface between China’s domestic and international economic circulations. Strengthening cross-boundary connectivity in the region is closely linked to the broader strategies of national-level reform and opening-up. Therefore, the processes of experimenting with new mechanisms of cross-boundary connectivity in the GBA need to be managed and finely balanced under the principle of coordinating development and security, especially in the financial sector. One of the most crucial and challenging aspects of “soft connectivity” in the GBA is to enhance and optimize the cross-boundary flow and allocation of capital. In recent years, cross-boundary digital payments have become increasingly prevalent in the GBA, supported by key digital platforms such as WeChat Pay and Alipay. In 2023, Hong Kong residents conducted over 35.5 million noncash payment transactions in Shenzhen, with a total amount exceeding 8.5 billion yuan. In terms of cross-boundary financial investments, building on the Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and the Bond Connect, the Cross-boundary Wealth Management Connect (WMC) was launched in September 2021, establishing a closed-loop channel for mainland residents and qualified residents of Hong Kong and Macao to purchase wealth-management products through their respective banking systems within the GBA. It provides more flexibility and convenience for retail investors to open and operate cross-boundary investment accounts directly. In 2023, the WMC added 28,400 new individual investors, a nearly 50 percent year-on-year increase, with cross-boundary wealth management remittances amounting to 10.6 billion yuan, and year-on-year growth of around 380 percent.
Looking forward, the development of the GBA will face an increasingly complex external environment. Amid rising geopolitical volatility and disruptive technological innovation, the industrial value chains and financial networks in the Asia-Pacific region are undergoing profound reconfiguration. This process will undoubtedly generate uneven effects across different regions and cities, creating a new set of winners and losers. Against this context, strengthening intraregional connectivity with bold infrastructure investment and institutional innovation, reducing legal barriers and transaction costs, and enhancing the efficiency of cross-boundary capital allocation will be crucial for promoting the high-quality development of the GBA as a leading global economic hub in the 21st century.
Li Chen is an associate professor at the Centre for China Studies, the Chinese University of Hong Kong; and a member of the Chinese Association of Hong Kong and Macao Studies.
Matthew Li is an undersecretary-general of the Hong Kong CPPCC Youth Association.
The views do not necessarily reflect those of China Daily.
