The Greater Bay Area, or Guangdong-Hong Kong-Macao Greater Bay Area to give it its formal name, is one of the hottest business topics in China.
It’s also something that isn’t as well understood in other parts of the world and it even gets confused with the Bay Area around San Francisco, from which it has drawn some of its inspiration.
In fact the GBA is home to a much bigger population, it boasts a much bigger economy, and it will be even more transformational for the wider world if it turns out to be the success that policymakers hope.
Our mission at GBA Brief is to bring you the business stories and debates from the world’s most exciting mega-city in a direct, informative manner.
Here are four key questions as starting points before you get into the Brief in more detail:
Where is the GBA?
The Greater Bay Area is made up of nine cities in Guangdong province in southern China, plus the special administrative regions of Hong Kong and Macau.
Shenzhen and Guangzhou are the best known of the cities from mainland China in the group, but they are joined by Foshan, Zhuhai, Jiangmen, Zhongshan, Huizhou, Zhaoqing and Dongguan. Each is dotted across a similar area around the Pearl River Delta, the region that pioneered China’s manufacturing miracle in the 1980s and 1990s.
How big is it?
The GBA is home to more than 70 million people, or about 5% of the Chinese population in total. It is a much bigger hitter in economic terms, contributing about $1.6 trillion to the national economy, or about 12% of Chinese GDP.
That makes it the 13th largest economy in the world, ahead of Spain and Australia. But the GBA isn’t just a huge proposition for China. Its exporters are hugely significant to the global economy: the region is home to three of the world’s top ten container ports and it generates more air cargo than San Francisco, New York and Tokyo combined.
Why is the plan for the GBA so important?
The region is already a vast economy but it will serve as the testing ground for some of the key questions shaping China’s future. What happens there will be watched closely for lessons on what could come next for the rest of the country.
Here’s a brief selection of things to watch. As an urbanisation story, how effectively can the region be transformed into one of the world’s most dynamic city clusters? Can economic growth keep pace with previous years, but in a greener, more sustainable way? Will businesses be able to deliver the modern and innovative industries that the Chinese government sees as essential for the next stage of the nation’s economic development? As one of the most outward-looking parts of China, how will the GBA forge the next generation of partnerships with international firms, and how will it succeed in bringing some of China’s most impressive brands to overseas markets?
How will we know if the GBA is a success?
Policymakers will judge progress against environmental metrics, health and lifestyle ratings, innovation and education scores, and measurements of economic output, both absolute and value-added.
The region’s achievements are also going to be reflected in whether such a diverse and uneven economic landscape can be transformed into something bigger and better than today. And there are other challenges to navigate across its different business cultures, currencies, legal systems and tax regimes.
What’s more, the GBA’s cities will need to be persuaded to see each other more as friends than rivals. Working together for the greater good will sometimes run against the grain. But at least each city brings its own skills and experience that should add up to more than the constituent whole: for instance, with Macau as a leisure and tourism destination; Hong Kong as a financial and professional services gateway; Guangzhou as a logistics hub and political centre; and Shenzhen as the heartland for tech and innovation.
Despite the challenges ahead, there’s no turning back: much of China’s older manufacturing model is moribund as far as the government is concerned, and the GBA must plot a path to a smarter and more sustainable future.