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Friday, December 13, 2019, 14:34
Bay Area high-tech sector growing at ‘impressive rate’
By Pamela Lin in Hong Kong
Friday, December 13, 2019, 14:34 By Pamela Lin in Hong Kong

The Guangdong-Hong Kong-Macao Greater Bay Area — a vital component of the high-technology sector of China’s economy — is continuing to develop impressively, said , senior fellow at Chongyang Institute for Financial Studies at Renmin University of China.

“The Bay Area is the most advanced and dynamic sector of the Chinese economy, with faster growth compared with California; China’s Bay Area grows approximately three times as fast as the US.” 

Comparing the Bay Area with the one nestled in San Francisco, Ross said the two are dominated by very large economies and also by a highly advanced level of technology, while noting that the Bay Area’s economy is growing at approximately three times that of San Francisco’s bay area.

The Bay Area is working hard on developing itself into an international innovation and technology hub. It consists of nine cities in Guangdong province and the two special administrative regions of Hong Kong and Macao, with the region’s GDP accounting for about 12 percent of the national GDP.

As China makes the transition to 5G networks, maintaining high levels of investment is required as immense capital expenditures will be involved, Ross said.

He said imported investment for 5G development naturally stands in need of careful control by companies and regulations by the government, but Huawei has passed every one of these tests.

The Shenzhen-headquartered telecoms giant had booked over 60 5G contracts around the world by the end of October. It started 5G research in 2009, when 4G was just starting to see commercial deployment. Over the past decade, Huawei has invested about US$4 billion in 5G development. 

Early in August, the Greater Bay Area 5G Industry Alliance was formed to promote the development of 5G in the region, and this is helping set the pace for a nationwide 5G ecosystem.

Discussing the violent protests in Hong Kong, Ross said Hong Kong’s mutually beneficial relationship with the Chinese mainland has not changed. “Under ‘one country, two systems’, Hong Kong has its own financial regulations and laws.”

“Therefore, it has a big structural advantage, which means Hong Kong is an offshore part of China’s economy and this advantage cannot be lost,” Ross said.

Although Hong Kong’s economy is growing at a slower rate than some of its peer cities in the Bay Area, the city’s unique role will not be replaced in the short term, he said. Hong Kong’s advantages make it more open to the world economy than the Chinese mainland economy currently is, Ross added.

He stressed that the Bay Area development plan could help Hong Kong recover in the future, and the SAR’s vital relationship with the mainland could not be replaced.

Chinese e-commerce giant Alibaba, which already listed on the New York Stock Exchange five years ago, made its debut in Hong Kong in late November. It is the largest IPO on the Hong Kong market so far this year. Its shares rose 6.6 percent on their debut.

“Such a trend will continue,” Ross said. “I would expect a number of large Chinese companies listed abroad will relocate themselves back to China over a period of years — especially in Hong Kong. This is due to the fact that Hong Kong has unique advantages in both being part of China and having an open economy.” 

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