Beijing has approved a blueprint for a technology-driven economic powerhouse in southern China to rival San Francisco's Silicon Valley despite doubts about the plan's feasibility.
The Greater Bay Area plan aims to link Hong Kong, Macau, and nine cities in the Guangdong Province – including the megacities of Shenzhen and Guangzhou – into a giant science and IT hub comparable to the combined size of San Francisco and Tokyo's bay areas by 2035.
China hopes to achieve this by integrating the cities' infrastructure and expertise in finance, manufacturing and technology by removing trade barriers, encouraging cross-border business, and eventually creating a single market.
More than three years in the making, the Greater Bay Area was first mentioned in a development action plan jointly outlined by China’s top authorities on economic planning, commerce and foreign affairs to create a new economic growth engine.
The mega zone covers 56,500 square kilometres, has a combined population of about 67.6 million. In 2016 the region accounted for 12.5 per cent of the country’s gross domestic product – about A$2.1 billion.
As a global trading hub, Guangdong Province alone exported more than $US640 billion (A$887 billion) of goods last year. Its cities of Donguan and Foshan are home to many of the region's factories, while neighbouring Shenzhen has already been dubbed China's Silicon Valley.
Major driver of future economic growth
The world’s longest sea-crossing bridge, linking Hong Kong and Macau to the mainland, which officially opened last October, also binds the region together as a major driver of future economic growth.
The proposal is in line with the country’s Made in China 2025 masterplan – an ambitious 10-year program aimed at transforming the manufacturing sector.
Analysts say it also a key plank in China’s strategy to match the US as a technology superpower.
Hong Kong chief executive, Carrie Lam, told the Asian Financial Forum last week that over time, the Greater Bay Area would rival that of the bay areas of Tokyo and New York "in economic might".
An internal study by an official think tank says the plan for the Greater Bay Area is about putting “one country, two systems” into practice. But differences in economic, tax, customs, politics and legal systems in Hong Kong, Macau and other cities pose key challenges, the study says.
Details of the Greater Bay Area blueprint are expected to be released next month.