Media

In response to media requests for opinions by HKU experts regarding the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, Professor Anthony Yeh Gar-On, Academician of the Chinese Academy of Sciences, Core Member of the Contemporary China Studies (Strategically Oriented Research Theme) and Chair Professor of the Department of Urban Planning and Design of HKU shares his views and insights in a media briefing on the future development of the Greater Bay Area.

Professor Yeh believes this is the last chance for Hong Kong to participate in the development of the Greater Bay Area for the benefit of Hong Kong as well as the Greater Bay Area and thinks there is the need for a new cooperation model between Hong Kong and the Pearl River Delta which is different from the past successful “Front Shops Back Offices” economic cooperation model in the 1980s and 1990s.

Professor Yeh first reviewed the studies he had carried out and participated in on the development of the Hong Kong-Pearl River Delta over the past 40 years. He thinks that the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area is not something new. As early as 20 years ago, the policy address in 2001 by Mr. Tung Chee-hwa, the then Chief Executive of HKSAR, had already proposed economic co-operation between Hong Kong and the PRD with a view to achieving a 'win-win' situation. Since then, the government, business communities and academics of Hong Kong and the Pearl River Delta have had a lot of discussions and recommendations on the development of the two regions. The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), the planning and construction of cross-border transportation infrastructures, the Shenzhen Bay Bridge and the Hong Kong-Zhuhai-Macao Bridge are products derived from these discussions and plans during that time, more or less 20 years ago. But why at present do we re-open the discussion again in the form of the Greater Bay Area and elevate it up to the national strategy? Are we not doing well enough? Or are there other pressing or compelling reasons? Professor Yeh said all the above may be true. One of the main reasons is that the global and national economy and technologies have undergone dramatic changes over the past decade, which leads to the necessity of good planning and coordination of the Guangdong-Hong Kong-Macao Grater Bay Area to better respond to the challenges brought by these changes in order for the Greater Bay Area to continue to sustain rapid economic growth since the economic reform and opening-up in 1978.

Professor Yeh pointed out that the regional cooperation model between Hong Kong and the Pearl River Delta had experienced many changes since the 1980s. The tide has changed. Hong Kong has great influences and contribution to the economic development of the Pearl River Delta in the 1980s and 1990s. However, the role of Hong Kong has weakened over the past two decades. The “Front Shop, Back Factory” (FSBF) model in the mid-1980s has created the prosperity of the manufacturing industries in the Pearl River Delta and producer services in Hong Kong. Since 2000, however, due to the economic development and industrial transformation of the Pearl River Delta, producer services began to develop rapidly in there too. Industries in the Pearl River Delta no longer have to rely heavily on producer services in Hong Kong. In more recent years, the sharp rise in wages and housing prices in the Pearl River Delta and the shrinking markets in North America and Western Europe, have weakened the competitiveness of traditional manufacturing industries in the Pearl River Delta. Industrial upgrading thus became inevitable and urgent. As a result, the “shop” function of Hong Kong and the “factory” function of the Pearl River Delta in the previous FSBF model were both encountering problems. New economic development and cooperation models between Hong Kong and the Pearl River Delta need to be developed.

In addition, since the global financial crisis in 2008, China's economy soared. In 2010, China jumped to become the third largest economy in the world. In 2013, it rose to become the second largest economy in the world only after the United States. In 2017, Guangzhou's per capita GDP reached US$22,317, while Shenzhen was US$27,199, almost equivalent to Hong Kong's per capita GDP in the 1980s and 1990s. Shenzhen’s total GDP recently even surpassed that of Hong Kong. Domestic demand in China and the Pearl River Delta has become a huge consumer market, attracting the world’s attention. Along with the geographical shift of the global economic focus from Europe and the United States to China, the challenges and opportunities of the Greater Bay Area are how to benefit from the huge domestic market in Mainland China and how to play a role in the process of China changing from a FDI-receiving country to a FDI source country.

In the previous FSBF model, Hong Kong technologies to the Pearl River Delta mainly belonged to the traditional “Industry 2.0”, especially labour-intensive industries. However, the Pearl River Delta, especially Shenzhen, has been investing more than 4% of GDP in research and development (R&D) annually since the 2000s, highly improving the development of high-tech industries, “Industrial 3.0” (e.g. information industry), and “Industry 4.0” (e.g. Internet of Things, artificial intelligence and robotics). The percentage and total amount of R&D expenditures of cities in the Pearl River Delta have far surpassed that of Hong Kong. The transformation of Dongguan's economic development provides a vivid example. Hong Kong contributed much to their rural industrialisation based on export-oriented industries from 1978 to 2004. However, since 2010, Dongguan’s industrial structure has been upgraded which is influenced more by Shenzhen rather than Hong Kong. The role and impact of Hong Kong on the new wave of industrial upgrading and high-tech development in the Pearl River Delta has declined a lot, far less than it used to be 20 years ago.

Professor Yeh suggests that Hong Kong needs to move towards an innovative knowledge-based economy. On the basis of its comparative advantages as an international financial center and a producer services center, it is necessary to further strengthen its innovation, human resources, STEM (science, technology, engineering, mathematics) education and R&D. Several recommendations are made. First, there is the need to actively promote a new “Front Desk, Back Office” (FDBO) model for developing its producer services. Hong Kong's producer service companies should set up front desks in the Pearl River Delta to develop and capture the huge domestic markets in Mainland China, while their main offices and manpower are still stationed in Hong Kong to provide producer services to serve their clients in the Mainland. Second, take full advantages of the “One country, two systems”. Based on international connection and a creditable good legal system, Hong Kong should help enterprises in the Pearl River Delta to go outside of China, and actively introduce overseas high-tech enterprises to invest in the Pearl River Delta, re-strengthening Hong Kong’s bridging role. Third, make full use of the advantages of high world ranking and research excellence of the universities in Hong Kong. The researches of universities in Hong Kong should be further integrated with high-tech manufacturing industries in the Pearl River Delta, enhancing the competitiveness of modern high-tech industries in the Greater Bay Area and building a world-class “new Silicon Valley”.

Convenient and timely cross-boundary exchanges in business and academics are extremely important for this new-round of development of the Greater Bay Area. It is convenient for businessmen and scholars in Hong Kong to cross the border to the Pearl River Delta, but it is still quite inconvenient and time-consuming for businessmen and scholars from the Pearl River Delta to come to Hong Kong. If scholars in the Pearl River Delta wish to visit universities in Hong Kong, it takes a lot of time for them to apply for a working visa from the Hong Kong Immigration Department. The time it takes is almost as long as going overseas. This greatly reduces their desire and willingness to perform academic exchanges with Hong Kong. We can utilise smart information and communication technologies (ICT) to facilitate and strengthen the connections between the business and academic communities in the Greater Bay Area, such as providing just-in-time online e-business visitor visa for businessmen and scholars in the Greater Bay Area that can be done through the internet, just like what we need to do to apply for visa to go to the US, Australia and Canada. It will be convenient for them to get a visa in a short time, when necessary, to go to Hong Kong for business and academic exchange. We should also set up Greater Bay Area Business Immigration counters at the border crossings, like the existing APEC Business Traveller counters, to shorten their time in crossing the border. In addition to facilitating them in crossing the borders, this Greater Bay Area Business Immigration counter can also help for publicising and place-making of the presence of the Guangdong-Hong Kong-Macao Greater Bay Area.

It is inconvenient for travellers in the Greater Bay Area to pay for their public transports when travelling in different cities. The local transport smart cards and QR codes in each city are different. It is very inconvenient to take buses in different cities in the Greater Bay Area. Hence, we should make full use of the Smart Information and Communication Technology (ICT) to develop a Greater Bay Area public transport card and QR code for the entire region. This will make traveling in the Greater Bay Area convenient, and residents and visitors can also feel the benefit and convenience in working and living in the Greater Bay Area.

Professor Yeh concluded by saying that amongst the recent restructuring of the world economy with the shifting focus on China and technology advancements of industry 3.0 and 4.0, and the rapid development of the Pearl River Delta, the window of cooperation between Hong Kong and the Pearl River Delta is closing rapidly. The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, which has just been introduced, gives many benefits and preferential treatments to Hong Kong. We should not live in the past, thinking that the Pearl River Delta is still backward and lagging behind. While Hong Kong still have some comparative advantages, Hong Kong should actively participate in the development and construction of the Greater Bay Area and achieve “win-win” benefits. The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area may be the last chance for Hong Kong to participate in the development of the Greater Bay Area. We should take full advantage of this invaluable opportunity. Development is like going against the water, if you do not advance, you will go backward!

For media enquiries, please contact:
Communication and Public Affairs Office, HKU
Ms Trinni Choy (Tel: 2859 2606/ Email: pychoy@hku.hk)
Ms Rashida Suffiad (Tel: 2857 8555/ Email: rsuffiad@hku.hk)
Ms Melanie Wan (Tel: 2859 2600/ Email: melwkwan@hku.hk)