Greater Bay Area – a super-hub of opportunity
We’ve seen the likes of Tokyo, New York and San Francisco demonstrate opportunity on the world stage, but arguably nothing quite on the scale of The Greater Bay Area. Linking Hong Kong SAR and Macau SAR with Shenzhen and the Guangdong region on the Chinese mainland, this area has a greater GDP than South Korea or Canada. As such, it is generating phenomenal pulling power for international businesses – including small to medium-sized businesses – looking for that next significant growth opportunity.
As metropolises go, China and Hong Kong’s Greater Bay Area (GBA) is a place of superlatives. The geographical linking of Hong Kong and Macau with what is often seen as the engine room of China’s economic output [Guangdong] may sound like a recent idea thought up by some wealthy and enterprising individuals. But its development is no accident, having been part of China’s economic policy for the region over many decades.
The GBA is actually a cluster of cities including Hong Kong, Macau and nine periphery municipalities in Guangdong – including Shenzhen and Dongguan, themselves vast ‘Tier 1’ metropolises. Its main attraction is quite simple: it is a hub of talent, innovation, manufacturing and finance that no self-respecting business in the area would want to ignore. As a business location, there’s literally nowhere in the world currently quite like it.
Daniel Chan, Head of Greater Bay Area for HSBC, explains the complementary appeal of the GBA: “Hong Kong is what you could call the international financial centre – well-equipped with professional services such as legal and tax advisers who can provide cross-border asset management solutions. Hong Kong also incubates international start-ups that are destined to link up across the border.
“Shenzhen is an innovation centre for local startups, and also the onshore gateway for international start-ups to expand into China. Guanzhou, is a commercial industrial hub with extensive experience in international trading, and also a growing source for the e-commerce sector.”
Daniel adds that the synergy between these hotspots within the GBA is part of its international appeal. Domestically, the area is looking forwards and upwards in equal measure. The rising middle classes are facing a GDP per capita boost to US$4.6trn by 2030, which will see them become high-spending consumers of the goods and services coming out of the GBA. “High-growth” is quite the understatement in this case.
And it’s not just GBA that benefits according to Dr. Patrick Lau, Deputy Executive Director of the Hong Kong Trade Development Council. China itself has been forecast to grow 8.4% this year: “China is a growth engine for the world, and the GBA is in turn the growth engine of China,” he says.
For international businesses, Patrick points to Hong Kong’s unique setting and business culture, which makes it ideal as a springboard location. “This is the time for international businesses to look at the GBA. Hong Kong obviously has a huge role in this as many businesses will be familiar with us speaking both English and Chinese. We have a very multicultural society with top talent in Hong Kong. Additionally, our systems are based on common law, which many companies from the UK and the Commonwealth will be familiar with.”
The specialisms of most interest according to Patrick are offshore finance, aviation, medical tech and AI/robotics. This, and the sheer size of the market, is what sparked interest from Andy Lam, MD of UK company, Gama Healthcare:
“For our business in China, the GBA is a great gateway to the rest of China. In population terms, the GBA boasts more than 75 million people – greater than the entire United Kingdom,” he says.
“The region is equivalent to a large global economy, where the population is young and has high spending power. And because of the rapidly growing GDP, we see the healthcare market in particular as holding enormous potential.”
Getting into the region was, for Gama Healthcare, a matter of knowing how the regulations surrounding healthcare equipment could be used to their advantage. “Gama has localised in the GBA now, and we operate under the same terms as local companies for registering our medical devices for sale. Before, if you didn’t have your own factory in China, you couldn’t get the distribution licence.”
He adds: “There is such a talent pool for innovation and an awareness of IP protection in GBA companies, that they are open to new concepts. As a UK brand, we hope to make Gama widely accepted by customers in the region.”
SME Attraction
So what are the other ‘pulls’ for small and medium sized businesses? Daniel says that it’s a place where multiple ingredients converge into real opportunity: “Hong Kong’s legal system and use of English are useful for a start, but you are also close to the factors of production and a booming market with world-class infrastructure. Hong Kong’s airport is a global hub, while the new express link now crosses from the Territory into mainland China.”
As for Patrick, he argues that the sky's the limit for the entrepreneurial businessperson. “It’s not without risk,” he says, “but that’s because it’s so competitive.
“It’s about getting people with an internationally focused mindset from the rest of the world to embrace more of the changes in China. If we can work to bring together people with a truly global outlook, a lot of innovation will come from that diversity.”
If you want to explore more about the different ways of expanding into the Greater Bay Area, please speak to your local relationship manager.
1https://www.imf.org/en/Countries/CHN
