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Macau visitors up 8% – thanks to HK

Macau welcomed 2,764,924 visitors in September, an increase of 8.0% year-on-year. This time, however, visitors from Hong Kong saw the strongest YoY growth, up 27.2%, compared to mainland arrivals, which grew 5.7%.

It has been a long, long time since Hongkongers came to Macau in such large numbers. They are obviously still dwarfed by overall mainland arrivals, but still: what could have made 564,771 Hongkongers rush over to the GBA’s sole collection of baccarat tables last month?

There were 1,924,490 mainland arrivals in Macau last month, of which 49.0% came from Guangdong.  Most of those were from the Greater Bay Area cities – 854,988 –  with strongest growth from Zhuhai  (269,327, up 50%) and Guangzhou (167,936, up 26.8%).

Air arrivals continued to grow strongly, up 16.3% to 294,677, while the ferries continued to lose share to the HZMB, with their traffic falling  45.0% to 416,713.

Hongkongers vote with wallets

One of the SCMP’s bigwigs recently posted the rhetorical question of whether Hong Kong has a silent majority or a terrified minority suffering through the protests in, well, silence and terror. His hunch was based on people writing, as well as those yearning to write,  anonymous Letters to the Editor.

We will never know how many people there really are in this minority group.  Lacking a really thorough market-research survey, all we can go with is anecdotes, such as those from agents talking about how many people are buying overseas properties to get Golden Visas. SCMP has another one today that is worth reading. Even though no one should confuse it with hard evidence of a sizeable percentage of the population.

Who will step up and do such a survey? Come on, SCMP. There must be plenty of students who would welcome the standard HK$60 an hour fee to poll people who are not joining the marches. Unless they are all in the marches themselves, that is.

It would be really interesting to know. We keep hearing that there are large numbers of people turning against the protests. If so, it would be helpful to see the evidence.

Shenzhen one of four AI zones

The Ministry of Science and Technology has named Hefei, Hangzhou, Shenzhen and Tianjin as the country’s four cities to build national pilot zones for “next-generation artificial intelligence”. 

Forgive us, but the announcement is full of the usual government jargon that makes little sense to an international audience but bears repeating here: Hefei is required to take full advantages of its talent and technology and strengthen the supply of artificial intelligence innovation; Hangzhou is required to strengthen the clustering effect of high-end resources and improve the level of artificial intelligence innovation and development; Tianjin is required to integrate artificial intelligence innovation resources and strengthen it’s intelligent technology industrial cluster;  Shenzhen, is required to build an artificial intelligence innovation highland with international competitiveness.

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Zhongshan and Jiangmen post weak trade data

Two of the Greater Bay’s western cities have posted weak trade numbers for the year to date, with Zhongshan slowing in September while neighboring Jiangmen continues to struggle.

Official data shows Zhongshan’s total foreign trade from January to September 2019 at RMB 181.55 billion, up 5.3% compared with the same period of last year. Exports were strong at RMB 146.84 billion, up 11.1%, but imports fell 13.7% to RMB 34.71 billion. 

These numbers were a deceleration, however. In September alone, the import and export value of Zhongshan was RMB 19.5 billion, down 5.1%. Exports were RMB 15.89 billion, up 0.2%, and imports were RMB 3.61 billion RMB, down 23.1%. 

Explanations focused on the drop in trade with the US, which was being slowly replaced by trade with Belt and Road Initiative countries.

In Jiangmen, the picture was one of a more constant decline over the same period. Total trade in the year to date was RMB 105.4 billion, decreasing 1.9% compared with the same period last year. Exports totaled 84.19 billion RMB, up 2.2%; imports were RMB 21.21 billion RMB, down 15.6%.

Jiangmen’s trade with BRI countries was also picking up slowly, up just 0.9%, but trade with the EU was holding up, at +7.6%, while ASEAN trade grew 5.4%

Guangzhou outperforms, services lead

Guangzhou’s economy is still growing at a healthy clip, latest official data shows. In the year to end-September, GDP growth of 6.9% was 0.6 percentage points higher than the same period last year, and higher than both the national (6.2%) and the provincial (6.4%) averages. Manufacturing saw its growth rate accelerate by 1.5 percentage points, yet it was the services sector that boosted growth the fastest, up by 5.4 percentage points.

In the first three quarters, the service industry boosted output by 7.9% YoY, driven by the digital economy, with growth in information services rising 17.5%. It has been recording double-digit growth now for 16 consecutive quarters. This is supported by news that the city’s Grade A office vacancy rate fell to a historical low of 3.7% in Q3.

Fixed-asset investment, meanwhile, grew by 21.1%, led by investment in the new energy vehicle industry and railways. Car investment soared 81.7%, thanks to major projects such as Evergrande Smart Car and Baoneng New Energy Vehicle. Infrastructure investment was up 27.6%, with the buildout of Metro Lines 11, 18 and 21 exceeding RMB 2 billion.

In terms of environmental management, the expansion of the sewage treatment plant in Guangzhou, the rectification of river pollution, and the construction of waste treatment facilities have boosted construction budgets. Investment in ecological protection and environmental management has increased by 2.2 times.

On the demand side, consumption growth is relatively stable, with total retail sales up 8.2%. Online stores, which accounted for about 30% of the total, saw sales rise 12.9%. Tourism is booming, too, with revenues up 11.7%, most of which were from visitors coming in from outside the province. “Nighttime consumption” in Guangzhou during the National Day holiday period jumped 12.5%, ranking first among the country’s four first-tier cities.

Macau to lease part of Hengqin Port

Macau has been formally approved by the Central Government to take control of an area in the new Hengqin Port, which is due to open on December 20. This will enable visitors to pass through both mainland and Macau Customs and Immigration inside the port’s main hall, an arrangement similar to Hong Kong’s West Kowloon Railway Station.

The National People’s Congress standing committee is due to ratify the arrangement today, after it was approved by the State Council’s Hong Kong and Macao Affairs Office. The Macau government will lease the area until the end of the SAR’s term, December 20, 2049.

The new arrangement will bring a significant improvement in the arrival experience for visitors to Macau. With immigration desks situated side by side in Hengqin, visitors will be able to cross the Lotus Bridge separating the two sides without having to disembark and pass through a second checkpoint. 

It is unclear, however, whether visitors will be able to take buses directly from Hengqin to any point in Macau, or whether they must still take a shuttle bus across before changing to local transport on the Macau side of the Lotus Bridge. The Macau government has not yet clarified the details of public transport arrangements between the two sides after December 20. 

It had originally been hoped that Macau’s long-delayed Light Rail Transit system would be connected directly to the new Hengqin station. It is not yet ready for operations, however, and so visitors will still need to be bussed across.

Hong Kong Wrap: 22/10/2019

New handouts: Finance Secretary Paul Chan is handing out HK$2 billion of relief measures to the logistics and tourism sectors, saying it will boost GDP growth by 2%. Read more.

How about a buck: Office vacancy rates have jumped from 4% to 7.6% within a few months in the world’s most expensive commercial property market as mainland firms stay away in droves, resulting in some desperate landlords offering deals as low as a token one dollar. Read more.

Foreign meddling: China’s foreign minister says the protests are about “violence, pure and simple” as the central government dials up the anti-foreign sentiment. Read more.

No middle ground: Neither side is showing the courage required to end the protests, writes columnist Tom Plate. Read more.

Judge not: A regional conference for top judges has been put on hold as Hong Kong’s lure for meetings and conventions dims. (Besides, what would they have to discuss?) Read more.

Knife attack: A man has been remanded in custody after turning himself in for the knife attack on a teenager at Tai Po’s Lennon Wall. Read more.

Mob justice? Police say they are investigating the Yuen Long triad attacks, having made 34 arrests. Protesters who showed up in the neighbourhood yesterday say it’s not enough. Roadblocks and tear gas ensued. Read more. 

Surreal estate: To understand how warped Hong Kong’s property market has become, read this explainer of the government’s new policy on relaxed mortgage caps for homes worth over US$1 million. It’s being pitched as a godsend for first-time buyers. Read more.

Cross-Strait conundrum: Taiwan and Hong Kong cannot agree on how to handle the voluntary surrender of the fugitive that sparked the crisis. Read more.

Train plans get turbo boost

The timing could not be better for the Greater Bay Area, home to arguably the country’s most ambitious high-speed railway network masterplan: The central government has decided to accelerate local governments’ spending on infrastructure – by doubling their originally approved budgets for this year. 

Although we will need to wait for further details to trickle down, it seems likely that Guangdong will move fast on this decision. The province isn’t included specifically in the new list of projects approved for spending, but this is likely because it already has so many major railway projects under way. However, a few of the region’s more ambitious plans have been languishing recently while awaiting approval from Up North. Those that spring to mind are the CrossBay Railway, which will run from Zhuhai directly under the bay to Shenzhen, and the second Intercity Railway linking Guangzhou to Hong Kong, which will pass through Shenzhen’s Qianhai and run all the way out to Lantau.

That is besides plans for 600 km/h Maglev lines, will likely now be given more serious study.

Watch this space. We will update in due course.

Intercity Railway to open Nov. 1

The region’s biggest and most important infrastructure project of the year, if not the decade, will open on November 1, it was announced today. Originally scheduled to open on National Day, October 1, the Guangzhou-Dongguan-Shenzhen Intercity Railway was forced to delay its launch after some technical issues came up that had to be resolved. But these have now been fixed.

After 11 years of construction, the railway line is a vital connector of 15 stations, all key nodes along the eastern coast of the Greater Bay Area. Running through its three biggest cities, in its first phase of development the railway will start at the Shenzhen Airport in Baoan and run up to Xintang station, on the border of Guangzhou and Dongguan. Sometime next year it will be extended to Qianhai in the south. The next stage thereafter will be to connect further northward, to Guangzhou East and then Guangzhou Airport and Guangzhou North. 

In the meantime, the Xintang station will connect with the old Guangshen Railway, enabling passengers to switch trains and go to Guangzhou East, which is in the Tianhe business district. Read our explainer here, with maps.

‘New Ocean City’ project unveiled in Shenzhen

The China Marine Economy Expo had its debut last week in Shenzhen. It turned out to be a highlight of the local event calendar, generating RMB 2.5 billion of deals while attracting nearly 100,000 visitors and more than 455 exhibitors from 28 countries and regions. 

The expo had a wide-ranging focus across three main sections: marine resources development and engineering equipment; shipping and ports; and emerging industries. Some impressive ocean-going vessels were rolled out, including the Xuelong 2, China’s first independently built polar research icebreaker, which made its maiden voyage from Shenzhen to conduct Antarctic research during the exhibition. 

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