The common flu probably kills more people every year than those that died from a single attack of SARS in the winter of 2002-2003. Try telling that to someone who lost a healthy friend or relative to the deadly pneumonia-like disease, however. There were few such cases back then – most victims were elderly – but a few were enough. Their deaths demonstrated the ability of the coronavirus to mutate and grow, sometimes severely. That resulted in Hong Kong, Macau and, eventually, much of Guangdong going into voluntary lockdown mode, causing widespread damage to the tourism industry. Cross-border travel dried up while MTR stations were emptied, airports deserted, hotel bookings cancelled, shops closed.
Family offices go out: Rich people are looking for better investment opportunities outside of Hong Kong, as the property market seems to be losing its luster, CBRE says. Read more on SCMP.
But … Property firms are positive about the potential of the GBA market inside Guangdong, KPMG says. Read more on SCMP.
As the annual report cards have been read out by each of the GBA’s nine mayors in recent days, it has become clearer that 2019 was much worse for the “little tigers” than for the advanced-manufacturing giants: Zhongshan, Jiangmen, Zhaoqing and Huizhou have been hit harder by the external trade slowdown than Guangzhou, Shenzhen, Dongguan and Foshan. (Zhuhai has been an exceptional case because of Hengqin’s development.)
They and their bosses, the party secretaries, have now all trooped up to Guangzhou for the provincial gatherings, where they must explain to each other what is going on at home. Some are coy. Others, like Zhongshan’s newly installed Party Secretary, Lai Zehua, have chosen to bravely lay out how bad the situation has become, while pledging to catch up with a bold industrial-upgrading plan in the coming years.
Zhuhai’s Mayor, Yao Yisheng, turned a few heads at the Guangdong provincial congress’ media session yesterday when he called out to Guangzhou’s deputy mayor, saying “I want to connect with you!”
He was not referring to their personal guanxi, of course, but to the stalled plan for Guangzhou’s Line 18 to be extended further southwards once it opens in Nansha later this year. Zhuhai and Zhongshan have been eagerly awaiting news of progress on the line, which has not been forthcoming since around September last year, according to local media.
HK to plunge: Office rents in Hong Kong’s Central district could plunge by as much as 40% in the next three years, according to one forecast. Read more on SCMP.
Beijing to tighten: Local governments are going to come under tighter financial control by the central government as the FSDC sets up special units within provincial branches of the PBOC. Read more on Caixin.
Financials to enter: Beijing has opened its financial markets wider in the latest US-China trade agreement. Caixin looks at what this means for US firms.
‘Seismic’ shift in HK: One of Hong Kong CE Carrie Lam’s closest advisers says the recent HK$10bn welfare package represents a “seismic” shift in the administration’s thinking. (We tend to agree, and expect this is just a start.) Read more on SCMP.
Chen Rugui, Shenzhen’s mayor, would not have said this without clearing it with someone higher up, so we have to assume that it’s being taken seriously: The GBA’s intercity railway network could be redesigned to run across the border to Hong Kong, linking all three of the region’s major international airports. Or, a new high-speed railway could be built, which would make travel time between the three nodes even faster.
Shenzhen’s mayor, Chen Rugui, sees no cause for concern in the city’s recent economic slowdown, pointing out that quality is more important than quantity. Industrial upgrading is causing some challenges as traditional industries either become more valuable through infusions of technology, or move out of the city, yet the mayor is upbeat about the future.
Shenzhen will see fixed-asset investment continue to grow strongly in 2020, the city government says, with projects under way budgeted to cost around 177 billion yuan, 23% more than 2019.
Infrastructure will be a big part of this, including 12 rail transit projects under construction. Others include the redevelopment of Binhai Avenue in Nanshan, where the futuristic Shenzhen Bay Headquarters Base is being built, and the establishment of a National Science Center in the Guangming “Science City” district.
Dongguan’s premier tech district, clustered around Songshan Lake and anchored by Huawei’s massive R&D center, put in a sterling performance in 2019, growing 11% YoY, according to local media.
Without giving a number in yuan, the report said Songshan Lake will generate tax revenue of about 16.3 billion yuan, ranking first in Dongguan. Fixed-asset investment of about 23 billion yuan and industrial output of 540 billion yuan were also first in the municipality. Advanced manufacturing and high-tech manufacturing accounted for more than 90% of that output.
The official signing of the US-China trade deal comes two weeks after the launch of China’s new Foreign Investment Law. We asked the American Chamber of Commerce in South China, based in Guangzhou, for their views on both the FIL, US-China relations, and the outlook for their business in 2020.