Chapter 1 – A Post Pandemic Assessment
(Continued…) The first four cities, highlighted in white on the map below, are the key business, technological, cultural, and leisure centers of the region. This zone also has been designated as a “portal” for international cooperation and trade.
The total area is approximately 56,000 km2 (35,000 sq miles) with a population of over 86 million and an estimated GDP of $1.7 Trillion USD in 2020.1 Demographically it is the youngest region in China with the highest level of education, and includes some of the most advanced infrastructure systems that connect to global capital and professional service providers. 2 Those resources, including transportation connecting cities in the region to China and abroad, will be discussed later in more detail.
Historically, the Greater Bay Area is China’s latest attempt, dating back to the early 15th century, to maintain “arm’s length” relations with the international community.3 The GBA is, in effect, a 21st century portal to mainland China and externally to the global economy in which the PRC is now asserting a leading role. At the same time, the Greater Bay Area offers involvement in several industrial sectors dependent on technology and financial services within China and abroad. More information about these other sectors will be provided in later articles.
The GBA was first introduced in July 2017 to refine several initiatives since the “handovers” of Hong Kong (1997) and Macau (1999). The timeline includes:
2000 –Hong Kong designated as a platform for English speaking countries, and Macau for Portuguese and Spanish speaking countries.
2002 – One country, two systems: that is, under Chinese rule but allowing capitalist trade.
2005 – Belt and Road Initiative: Extending the ancient “Silk Road” (land-maritime) globally 4
2017 – Greater Bay Area Region: Concentrating the resources of the Pearl River Delta
GBA’s Primary Goals
Create an Open Regional Community to coordinate innovation centered on technology
Foster Domestic and International Integration via technology hubs, carriers, platforms
Enable Environment and Resource Conservation through regional innovation modeling 5
Much has occurred since its introduction in 2017, which has led to criticism concerning China’s motives and doubts about the project’s future. In spite of the doubts, the GBA remains the fastest growing area in China, and is looked upon by some Western observers as the “center of gravity of China’s economic activity”.6 While there remains competition between East and West in technology and finance, various analysts seem willing to see whether the GBA becomes integrated into international networks and economies, offers innovation and cooperation, and if it does provide a model for resource conservation that other regions could replicate.7
Putting political and cultural issues aside, such a massive undertaking as the GBA, although stalled by the pandemic and the global recession, deserves a fresh look at its benefits and challenges as many countries begin to recover. That will be one of the goals of future articles.
A GBA (inspired) Stock Index
Another way of understanding how GBA’s global reach might influence technology and financial service providers, in particular, is to create an index of publicly traded companies with international footprints that can be followed over time. Many companies conduct business in Asia, the United States, and the European Union. Large-capital corporations are more susceptible to economic trends and government policies that will affect the global recovery.
Here’s a chart of the index (in purple) showing the actual percentage of gains and losses, as compared to the Dow, Nasdaq, and S&P 500, over the last three years. The fluctuations indicate the rise and fall of the United States economy, and global conditions, during the same period.
The goal is to use the stock index as a “real world” measure to track the GBA and gauge its effect on the global economy. An underlying question will be whether the GBA directly or indirectly reflects the progress of many companies that depend on technology and financial services. I suspect that it does, but the question will remain open as the project continues.
As the GBA matures, its progress will be reflected in the index, and in news reports, available data, and interviews with participants in future articles.
It should be an interesting ride. I hope you will follow along.
1. See the GBA Overview: https://www.bayarea.gov.hk/en/about/overview.html
2. Ibid. The region includes the University of Hong Kong and the University of Macau at Hengqin. The latter is in a section of Zhuhai that is also a high technology incubator set up under the GBA, and was recently connected to the Hong Kong, Zhuhai, Macau bridge that runs across the Pearl River Delta. (The author was a visiting scholar at the University of Macau in November 2015 under a Fulbright grant. He has been a regular visitor to the region since 2013.)
3. China initially established diplomatic and trade relations with Southeast Asia and the Middle East through a series of voyages conducted by the “Treasure Fleet” of Zhu Di, the Ming Yongle Emperor, from 1405 – 1433. Louise Levathes, When China Ruled the Seas: The Treasure Fleet of the Dragon Throne, 1405-1433, Oxford University Press, 1994.
4. For reference up to 2011, see Carmen Amado Mendes, et. al., “Accessing the ‘One Country, Two Systems” Formula”, University of Coimbra, No. 369, June 2011.
5. The comprehensive outline of the GBA development plan is at: https://www.bayarea.gov.hk/en/outline/plan.html
6. McKinsey & Co. “The Rise of China’s Greater Bay Area”, 2019. https://www.mckinsey.com/cn/our-insights/perspectives-on-china-blog/the-rise-of-chinas-greater-bay-area
7. KPMG – HSBC, “Keys to Success in the Greater Bay Area”, 2020.
