There have been a lot of misunderstandings about the Bay Area Plan. The misunderstanding stems from two factors. One is because people think plans are always anti-market. Interventions that go against the market are believed to be counterproductive. The other is politically driven. Some people with biased perceptions against the mainland are against integrating with the mainland economy. As “localists”, they somehow believe that Hong Kong should sever ties with the mainland as much as possible.
The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area was announced about a year ago. When it was announced, people were curious why the roles of the 11 cities were more or less their current roles. People then asked: What good is the plan if the “assigned roles” are already our current roles? They don’t understand that China’s planners will never go against the market. The Bay Area Plan is therefore pro-market rather than anti-market. So there should be no worries that the plan would go against the market and would cause economic blunders.
People then will naturally ask: If that is the case, why is there a need for the plan in the first place? My analysis tells me that the plan is in order to advise the governments of the 11 cities to work together with team spirit. Without the perspective of the 11 cities as a team or a city cluster sharing the same interests, their policies could neutralize each other, leading to a waste of resources. For example, competition among the cities based on self-interest could undermine the interest of the entire area. Moreover, because of a lack of coordination among the cities, some artificial bottlenecks could hold up the development of the entire region. These bottlenecks could be due to infrastructure, institutions, laws, or administrative arrangements. The plan is to encourage better communication and coordination among the 11 cities so the bottlenecks can be alleviated or removed. In short, the plan is mainly for government officials so they can do a better job. As far as market participants are concerned, the resulting better coordination and improved infrastructure design will enhance their opportunities and the ease of running their businesses. It will be up to each market participant to take advantage of the new opportunities.
The plan is in order to advise the governments of the 11 cities to work together with team spirit. Without the perspective of the 11 cities as a team or a city cluster sharing the same interests, their policies could neutralize each other, leading to a waste of resources
Naturally, those with a predisposed determination against integrating with the mainland will not take up the opportunities. In Hong Kong, which is a free-market economy, they are free to do what they want in the marketplace; they will also bear the consequences of missing out on opportunities.
While many people still say that they don’t know what the Bay Area is about, quite a number of entrepreneurs are capitalizing on these new opportunities. I was thrilled to see “An open letter from the founders of StartupsHK: Forward into the Greater Bay Area” on the internet this past weekend. In that open letter, which was dated July 9 last year, the group StartupsHK announced: “Today we are announcing a full NGO rebranding from StartupsHK to StartupsGBA — to signify our expansion from just Hong Kong to the 10 other cities that make up the Greater Bay Area.”
The letter went on to say that the 10 other cities “will get a lot more interesting for startups over the next few years. And so we thought, since we started out to be a group that helps startups make connections and grow their networks, that this was the perfect time after 10 years of growing our amazing ecosystem to now expand it to add in 60 million more people. We believe by making Hong Kong great again via technology and innovation, we will be able to build a stronger community that works for a better Hong Kong.”
The letter put it very well, and it shows that the market is responding! As a veteran economist, I have full confidence that the market will always respond to opportunities. The Bay Area Plan is creating more opportunities and greater ease for consumers and investors alike, and it will become even more attractive as time goes on.
I participated in an RTHK Backchat program last week, and I heard my fellow commentator Peter Guy, a veteran banker who has also worked at the World Bank, telling the audience that the China market is irresistible. Investors all over the world do not want to miss the business opportunities that are presenting themselves on a daily basis.
China’s growth last year reached 6.1 percent, and that is roughly three times the growth rate of the United States. China’s GDP has grown to exceed 16 percent of the global economy. China is clearly the engine of growth for the world. Data also shows that Guangdong province grew faster than the national average, and reached 6.4 percent in the third quarter. There is little doubt that within Guangdong, the Bay Area grew faster than 6.4 percent.
Tesla’s gigafactory in Shanghai broke new ground in December 2018 and has already delivered its first cars. Tesla’s stock price reached new highs recently. Anyone who disregards the Bay Area, which is blessed with some of the most technologically innovative firms in the world, does so at their own peril.
The author is a senior research fellow at the Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute, Lingnan University.
The views do not necessarily reflect those of China Daily.
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