Published: 11:35, April 12, 2021 | Updated: 19:41, June 4, 2023
GBA’s promise of prosperity
By Anthony Lin

With COVID-19 vaccination programs rolling out in different countries, the global economic and business environment is expected to start improving in the second half of this year. But China has already shown a more apparent growth momentum and is set to lead the economic recovery of Asia and even the world.

In all this, the Guangdong-Hong Kong-Macao Greater Bay Area is expected to play an even more important role in connecting China to overseas markets.

Recently, China has reached a number of trade agreements, including the Regional Comprehensive Economic Partnership, the largest free trade agreement, and wrapped up negotiations on the EU-China Comprehensive Agreement on Investment.

China has already ratified the RCEP agreement. RCEP member countries account for up to one-third of global gross economic output and trade volume, and once the CAI is signed, it will likely reinforce China’s ties with the European Union.

These new trade deals will significantly shift the flow of world trade and enhance regional connections between China and Eurasia. As the policies of the Greater Bay Area are implemented, its role in supporting China’s opening-up will be even more important, facilitating cross-border trade and capital flows in the region.

The Greater Bay Area has become China’s e-commerce industrial base. Market data show China has more than 3.78 million e-commerce-related companies, of which nearly 20 percent are located in Guangdong province, more than any other province in the country.

Guangdong is also home to 68 percent of the 570,000 cross-border e-commerce-related companies in China.

The COVID-19 pandemic has dealt a heavy blow to a wide range of industries. But the cross-border e-commerce industry has been growing exceptionally well because more and more retail customers are shifting to online consumption.

As the global economy gradually recovers, global trade will see a sharp rebound, which will benefit cross-border e-commerce enterprises and stimulate economic activities in the Greater Bay Area, while enhancing connections between the area and other regions.

On the environmental front, the Organisation for Economic Co-operation and Development has forecast that, in order to achieve the emission reduction targets set in the Paris Agreement, the world will need to invest US$6.9 trillion in green infrastructure every year up to 2030 — with emerging Asia alone needing to invest US$1.7 trillion every year.

The Hong Kong Special Administrative Region will play an important role in financing and raising capital for such green projects in Asia, especially the Greater Bay Area, further raising its global standing and boosting its socioeconomic development.

Last year, Canvest Environmental Protection Group Co Ltd, the largest waste incineration power generation company in the Greater Bay Area, obtained a HK$2.5 billion (US$321.91 million) syndicated loan with the help of Standard Chartered Hong Kong to fund its new waste incineration power generation projects and expand its business in Southeast Asia and South Asia.

Instead of the conventional landfill approach, the Canvest group uses harmless incineration methods to dispose of waste and turn it into a resource for energy. This helps save land resources and promotes broader green economic growth.

As the Asian region is promoting sustainability and low-carbon transition, Hong Kong will play an important role as an international sustainable finance center and unleash the huge potential of debt and project financing opportunities in the Greater Bay Area.

A recent market wealth report shows that four out of every 10 cities in China with most households that have more than 6 million yuan (US$917,184) in assets are located in the Great Bay Area. And if all the cities in this area were combined, such affluent families would number a million, surpassing Beijing and Shanghai, which are at the top of the list, and reflecting the enormous potential of the wealth management market in the area.

As the Great Bay Area’s economy continues to thrive, people’s assets in the area are expected to increase further, boosting the demand for wealth management. And after the Chinese mainland-Hong Kong border is reopened, the flow of people, goods and capital will gradually return to normal, facilitating the development of different “connect” schemes, including the Wealth Management Connect and Insurance Connect, in the Greater Bay Area.

The Standard Chartered Greater Bay Area Business Confidence Index shows that business confidence has been rising in the Greater Bay Area despite the impact of the pandemic.

The total population of the Greater Bay Area is expected to increase from the current 70 million to 100 million by 2035, when per capita GDP is likely to exceed US$50,000. So, for companies in Hong Kong and other parts of the region looking for growth opportunities, the Greater Bay Area should be a preferred choice.

Human capital will play a vital role in fully unlocking the potential of the Greater Bay Area. Many companies and institutions, including Standard Chartered, are participating in the Hong Kong SAR government’s Greater Bay Area Youth Employment Scheme. 

As the central government strives to develop the Greater Bay Area into a world-class city cluster as part of its long-term development strategy, we expect it to play a more crucial role in supporting China’s further reform and opening-up.

The author is CEO, Greater Bay Area, Standard Chartered. 

The views do not necessarily reflect those of China Daily.