I predicted in a 2020 article that “the market-based bay area plan will work out effectively”. Today, we can say that the “Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area” has blossomed into a huge success. As I remarked in that article, the plan appeared to be short in detail. However, the plan has succeeded exactly because it was short in detail. The plan could not have been so successful if the planners had put in all the details for all the stakeholders to follow step by step. Micromanagement is never the way to success. On the other hand, spelling out a desirable vision that all the stakeholders can identify with, motivating all stakeholders to come up with their own ideas to solve problems, providing policy support as needed, plus hard infrastructure like ports, airports, roads, railways, bridges, and telecommunication, and soft infrastructure like the rule of law, a culture to work together as team members rather than eyeing each other as competitors, and exercising effective governance at every turn, will provide fertile ground for the project to take off.
Some pessimists initially regarded the project as destined to fail, citing that the project involves a “one country, three systems dilemma” of merging the three jurisdictions of Hong Kong, Macao and Guangdong province, not just economically but also from a cultural, political and legal point of view. Interestingly, exactly because of these problems, there is a need to introduce the plan to smooth out all the problems.
The plan asks all the nine Greater Bay Area mainland cities plus Hong Kong and Macao to capitalize on all the strengths that each member can offer by working together and seeing each other as team members. After the plan was announced, all 11 cities began to look into what each can do and how they can collaborate to smooth out any problems. At the same time, all levels of governments started to work closely to improve the infrastructure and the institutions that will facilitate the transformation.
Since 2019, we have witnessed various initiatives taken up by the partner cities, often in collaboration with one another. All along, the central government and the Guangdong provincial government would lend their support accordingly. The result is a huge success.
In 2025, the region’s economic output surpassed $2 trillion. With less than 0.6 percent of China’s land, the region generates about one-ninth of the nation’s total economic output. The nine mainland cities alone surpassed 9 trillion yuan ($1.34 trillion) in total imports and exports, contributing a quarter of the country’s foreign trade growth. The Shenzhen-Hong Kong-Guangzhou innovation cluster, moreover, has achieved a historic milestone, being ranked first in the Global Innovation Index 2025, attesting to the region’s dynamic innovation capabilities and the strong collaborative synergy within the region.
The Northern Metropolis project of Hong Kong is the latest example of a collaborative effort with Shenzhen to drive innovation and advanced manufacturing in the Greater Bay Area. It is just starting, and already several leading firms and many startups have signed up to be part of the project. Examples are Lenovo, AstraZeneca, and Goertek Microelectronics. China Daily earlier reported that at least 17 international biotechnology companies had established operations in Hong Kong so far this year, with several having set up Asia-Pacific headquarters in the city— drawn by its technology strengths, global access, and convenience for cross-border research. Swiss diagnostics company Quant Biomarkers and a French company, OncoNex-Remunity Therapeutics, are expected to invest in the Northern Metropolis. Moreover, The Office for Attracting Strategic Enterprises, set up in 2022, has cumulatively attracted 124 firms to set up operations in Hong Kong, including big names like Pfizer, DiDi, and AutoFlight, with some settling in the Northern Metropolis.
Then of course we must mention Qianhai, which can be considered as almost like an extension of Hong Kong in Shenzhen. Similarly, Hengqin is very much like an extension of Macao in Zhuhai. These institutional reforms were driven by the central government through the promulgation of the “Overall Development Plan for the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone” and the “Overall Development Plan for the Guangdong-Macao Zone In-Depth Cooperation Zone in Hengqin” on Dec 21, 2023. As reported in China Daily on April 19, 2024, eligible firms in Qianhai are allowed to pay enterprise income tax at a preferential rate of 15 percent. For individuals, Qianhai will subsidize the excess of 15 percent of personal tax for top professionals recruited from abroad. Hong Kong residents working in the zone will also be exempted from paying taxes higher than in Hong Kong. According to an announcement made by the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone Authority in June 2024, Qianhai had rolled out measures to promote the development of legal services in Shenzhen and Hong Kong and boost international cooperation in the area. The new measures would remain valid for three years.
Overall, the nine Greater Bay Area cities on the mainland have done very well thus far. In the first half of 2026, growth over the year is estimated at 6.3 percent. Inclusive of Macao and Hong Kong, the overall Greater Bay Area growth rate is estimated at 5.4 percent, much higher than the national average of 4.7 percent. The benefits of agglomeration economies facilitated by the Greater Bay Area plan are expected to continue well into the future.
The author is an honorary research fellow at the Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute, Lingnan University, and an adjunct professor at the Academy for Applied Policy Studies and Education Futures, the Education University of Hong Kong.
The views do not necessarily reflect those of China Daily.
