Hong Kong and the Great Bay: a political manifesto disguised as a business plan?

Only 12 months after the official launch of President Xi Jinpings' personal master plan for an integrated economic power of nine Chinese cities combined with Hong Kong and Macao, the Greater Bay Area (GBA) project appears to be dead in the water.

Since last February, when Beijing published the Development plan (ODP) for what is officially called the Guangdong-Hong Kong-Macao Great Bay Region, there was no shortage of entrepreneurs lining up to amass superlatives on the project.

Great Bay area. Photo: GovHK.

However, some admit reservations in private, and the combination of the US-China trade war, protracted social unrest in Hong Kong, and the deadly coronavirus, may cause the project to sink as a viable economic entity. There are many in Hong Kong who think the GBA is increasingly looking like an unpopular political manifesto disguised as a business plan.

ACS is just a horrible concept for me, says Carmen Li Ka-man, who is scheduled to graduate from Shue Yan University in Hong Kong this summer, who has participated in both pro-democracy protests as a participant and as a trainee journalist for a local press agency. She says that despite the economic problems in Hong Kong, she will not look to cities in the GBA for employment or continuing education opportunities.

If you go to the GBA, you won't have a bright future, she says, I just don't trust the government, the legal system or the city policies of the GBA.

Media reports on a survey released in January by the Hong Kong Guangdong Youth Association indicate that these views are by no means exceptional. More than 70 percent of Hong Kong youth surveyed felt that the city should keep its distance from mainland China, and almost 60 percent said the GBA plan would do more harm than good in Hong Kong. .

Cities like Shenzhen can be modern and affluent and maybe I can find a good job, but it only takes one new Beijing policy and I could lose everything overnight, says Li.

Carmen Li Ka-man. Photo: Stuart Heaver / HKFP.

When asked if his friends felt the same way, Li just laughed. None of my friends would ever go to mainland China to develop their career path; the social movement in the past eight months has changed all that, she says.

Many local politicians agree. After the social movement of the second half of last year, our young generation is struggling to integrate into the life of the ACS, says former legislator and treasurer of the Democratic Party , Sin Chung-kai.

Sin thinks that the vast majority of young people will not be looking for opportunities in the GBA and although he is not totally against the project, he questions the economic meaning of the assimilation of Hong Kong to Guangdong Province.

Some outside the pro-democracy camp have also questioned the speed of integration with other ACS cities. In January, real estate magnate Adam Kwok Kai-fai suggested to the Guangdong Chinese People's Political Consultative Conference (CPPCC) in Guangzhou that the daily quota of people from Mainland China moving to Hong Kong be reduced by half to 75, to ease cross-border tensions. .

While the corporate and real estate sector has the most to gain from ACS, recent surveys suggest that even their enthusiasm is waning.

KPMG China, HSBC and the Hong Kong General Chamber of Commerce (HKGCC) commissioned YouGov to conduct a investigation in July-September 2019, out of 747 business leaders in mainland China, Hong Kong and Macao, about ACS.

The main results were generally warm in that around half (52%) of the executives surveyed plan to expand geographically in the GBA by 2022, but confidence breaks have also been exposed.

According to the report, survey respondents highlighted a number of challenges in achieving growth and almost three-quarters of executives (73%) cited political or regulatory ambiguity, uncertainty and ignorance as the most significant risks to their ACS business plans, compared to 68%. in 2018.

It is very complex to integrate three different economies with different laws, customs regulations, tariffs, business subsidy regimes, environmental regulations, immigration rules, quality control accreditation and currencies. Experts believe that little progress has been made on the important details essential to the free movement of goods and people.

In a glowing official tribute to the first anniversary of Chinese state media Xinhua described how cities in the Bay Area have become increasingly close to one another and obtained much easier flows of talent, goods and capital, but this seems an extremely optimistic assessment.

I am not optimistic, maybe even pessimistic about ACS. So far, his progress has been piecemeal, says Dr. Collin Wong, associate dean (external) of the School of Decision Sciences at Hang Seng University in Hong Kong.

Wong is an expert in trade, logistics and supply chain management who generally supports the concept of GBA but thinks that recent events have slowed progress, or even have reversed.

GBA concerns integration and cooperation in two SARs and nine cities, but social unrest in Hong Kong has raised issues of separation and isolation. It won't help, she says, and believes trusting government is a crucial challenge for GBA.

However, his biggest concerns relate to the poor execution of the GBA vision, the lack of a strategic plan and the inability to persuade citizens that this brings them tangible benefit.

The central government really wants this to be successful, but I don't see at an operational level the coordination required to make it possible and viable, she said, adding that there are four international airports and three of the top ten ports in the world. world in the GBA, but currently they have no idea how they should collaborate.

She says her research indicates that key companies and other stakeholders usually only hear about the latest initiative when it is published and that there is a complete lack of transparency in it. 39; policy development or consultation with key stakeholders.

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And there is another perceived obstacle to the free flow of business expertise in the GBA area. Even before the current fear of coronavirus, seasoned expatriate businessmen in Hong Kong were more wary of trips to mainland cities, after a series of detentions, arrests and refusals of entry to strangers. In December, two senior US officials from the Hong Kong American Chamber of Commerce were arrested and refused entry to Macau for no reason.

Despite the evidence of political resistance to GBA, the failure to sell its benefits to ordinary citizens, its inept implementation and the lack of trust in legal and political systems, there are still experts who think that it is unstoppable and business leaders who perceive it as an economic panacea.

In tribute to the first anniversary of ACS, Xinhua reported Maggie Lee, KPMG China partner in Hong Kong, said the policies have created tangible benefits for Hong Kong businesses and residents. The quote referred to efforts to reduce the tax burden on Hong Kong workers working in the GBA and to facilitate their education of their children and the purchase of homes there.

But unless social and welfare systems compare favorably with those of Hong Kong and citizens have confidence in the political system as a whole, there are not enough rational reasons for them to people move.

Christer Ljungwall is an economist with long research experience in China and a senior economist at the Asian Development Bank who studied ACS. He argues that the concept of GBA will not be damaged by trade friction with the United States, social unrest in Hong Kong or the recent coronavirus health crisis. He says this is simply due to the fact that the GBA Development Master Plan (ODP) is part of a long-term structural transformation of the region.

Mainland China would never let this plan derail – maybe slow down, but never stop, that is far too important, he said.The plan has already slowed to a virtual halt however, and despite its importance to Beijing, it appears to be in imminent danger of sinking without a trace, at least with Hong Kong as the center. The energy and resources needed to deal with the coronavirus public health crisis will mean that GBA will slide further down the political agenda, at least temporarily.

Conferences may still take place, familiarization trips organized and glowing surveys published, but sometimes the GBA looks like mythical emperors, in new clothes, as business leaders rush to praise A vanity that only really exists in the mind of the emperor.

The lack of tangible progress offers Beijing the opportunity to review its approach and use a more transparent, consultative and engaging approach. The shortcomings of the implementation of an authoritarian policy directed from top to bottom were revealed at the beginning of the public health crisis in Wuhan.

"The concept of GBA is still good for reducing internal competition and establishing a long-term dream, but the execution has not been as good. Recent events may not have completely sunk the ACS project, but it may have temporarily left the surface and an overhaul is necessary. said Wong.