Caixin Global has a series of charts taking a deeper look at how intertwined Hong Kong’s economy is with the mainland. They are well worth a look. Highlights:
- Hong Kong’s plateauing investment in mainland
In the first seven months of 2019, $55.37 billion of inbound direct investment in the mainland came from Hong Kong (including investment via free ports such as the Cayman Islands, Mauritius and Barbados), accounting for 70.27% of the total.
- Most inbound investment to China comes via Hong Kong
The value of direct investment from Hong Kong in the mainland in 2018 was $89.9 billion — excluding investment through free ports — which was way more than investment from anywhere else.
- Most outbound investment flows through Hong Kong
In 2017, $91.2 billion of the mainland’s outbound direct investment flowed into Hong Kong, making it the most important destination for mainland capital. Britain’s Virgin Islands ranked second, attracting $19.3 billion.
- Most tourists to Hong Kong come from the mainland
In the first half of 2019, 27.6 million mainland tourists visited Hong Kong, accounting for nearly 80% of tourists to the city. Last year the number of mainland tourists to Hong Kong exceeded 50 million, a record high.
- Fewer mainland migrants to Hong Kong
In 2017, the number of mainland migrants to Hong Kong was about 47,000, down 10,400 from the previous year.
Guangdong may be weathering a difficult external trade environment, yet
growth in one key segment is exploding: cross-border e-commerce. In the first
half of this year, imports and exports ordered and shipped via the internet
grew 76.8% to RMB43.02 billion. Nearly all went through special bonded zones in
Guangzhou, Shenzhen, Zhuhai and Dongguan, where 3,000 enterprises have clustered
to take advantage of easier tax and other regulations.
Admittedly, this is still a small drop in the bucket. The province’s overall
trade was worth RMB 3.28 trillion in the first six months, up 1.3% year-on-year,
accounting for 22.4% of China’s total imports and exports. More than half was
accounted for by private enterprises, which saw their trade numbers grow 5.9%, up
2.2 percentage points YoY.
Hong Kong may be a worrisome mess, but foreign
investment continues to like what it sees in the rest of the Greater Bay Area.
In Guangdong, 7,820 new foreign direct investment enterprises were established
in the first half of the year, worth RMB83.77 billion, up 5.9% YoY.
One of the highlights came from Fortune 500
company General Electric (GE), which has set up the Asian Biotechnology Park in
Guangzhou. It now plans to build a world-class offshore wind turbine assembly
base in Jieyang as well as an operation and development center in Guangzhou.
The provincial government has made efforts
recently to improving the business environment by introducing an “express lane”
for multinational companies to receive approval on projects. As a result,
Siemens has signed a comprehensive cooperation agreement with Guangdong, while
another 17 major projects have settled here.
Investors in China are wringing their hands after economic data for July showed declining indicators across the board. However, until we get detailed data for Guangdong, it is hard to know what that national data means for investors in the Greater Bay Area. What we do know is that in the first six months of the year, the nine GBA cities inside Guangdong mostly outperformed the national average, with particular strength seen in the province’s two Tier-1 cities of Guangzhou and Shenzhen. Not only did they grow at rates nearly a full percentage point higher than the national average (7.1% vs. 6.2%), but their growth was accelerating over January to June.
Last week we explained how two of Guangzhou’s districts, Tianhe and Nansha, were propelling the city’s industrial upgrading in finance and tech. Today, we take a closer look at Shenzhen’s leading districts. Here, we see four, also being driven by growth in finance and tech, plus the buildout of the aerotropolis. They are: Nanshan (home to Tencent and others), Longgang (home to Huawei), Futian (home to Ping An) and Baoan (home to the airport).
Continue reading Shenzhen’s ‘big four’ districts drive growth
It is little wonder Huawei chose Dongguan as the site of its biggest-ever developer conference, which is currently taking place at its new R&D-focused campus that looks like a mini-Europe. The city has released data showing that investment in “technological upgrading” shot up nearly 50% in the first half of the year.
Continue reading Dongguan tech investment surges in 1H
Workaholics in the provincial capital who can never find enough time to shop, or dine, or drink as much as their friends do are about to run out of excuses. The city’s Commerce Bureau has released a “Guangzhou nighttime economy map” that lists 15 commercial clusters as landmarks of “Guangzhou by Night”. This, it says, is a blueprint for the city’s plans to “enrich and expand nighttime consumption options” and develop Guangzhou into a “sleepless city” in the Greater Bay Area.
Continue reading Guangzhou focuses on nightlife
Zhuhai’s economy grew 7.0% in the first half. Looking closer at the details, it would appear that a construction boom has helped, and it would not take a genius to guess that this means Hengqin Island’s massive buildout is getting up to speed.
According to the Zhuhai Statistic Bureau, the city’s construction industry was worth RMB38.807 billion, up 32.4% year on year. That is out of a total GDP of RMB148 billion.
Continue reading Zhuhai boosted by construction
With a president whose finger is never far from the Tweet button, it’s best to be prepared. The People’s Bank of China said today it will sell RMB30 billion (US$4.3 billion) of short-term yuan-denominated securities in Hong Kong next week, signaling its plan to absorb offshore liquidity and cushion against further depreciation of its currency versus the US dollar, which shocked markets yesterday by breaking through the 7-to-1 level and resulting in the US labeling China a currency manipulator.
Continue reading PBOC will sell more bonds in HK
In the wake of the Qianhai Cooperative Forum 2019, which was held at the weekend, the city has released statistics showing how fast the special economic zone is ramping up investments and output.
Official data shows utilized foreign direct investment in Qianhai jumped 12.1% to $2.533 billion in the first six months. Hong Kong companies were the most aggressive, and now account for nearly 90% of the zone’s total utilized FDI of US22 billion. Their utilized FDI was 60% of Shenzhen’s and 20% of the entire province’s during the first half.
Continue reading HK investment ramps up in Qianhai
Shenzhen’s GDP in the first half grew 7.4% YoY to RMB1.213 trillion, driven by three main trends:
1) A robust services industry, especially in the internet sector;
2) Resilient consumers, especially online, with total retail sales up by 8.3%; and
3) A dollop of government cash put into infrastructure.
Continue reading Shenzhen’s economic data unpacked