The long-awaited Guangdong-Hong Kong-Macau Greater Bay Area (GBA) masterplan was released on February 18, 2019. As had been expected, the 59-page English translation reads like a broadly ambitious guide to how the region is expected to develop over the coming years, leaving more specific implementation details to be fleshed out by local authorities, albeit under the guidance of the central government.
Although short of detailed prescriptions, the document provides a glimpse into how quickly the region is likely to change in the coming years: by 2035, nine Guangdong cities plus the Hong Kong Kong and Macau SARs (“9+2”) should be the world’s leading “bay area”. This would involve roughly doubling the region’s GDP over the next 15 years, thereby surpassing Greater Tokyo, Greater New York and Greater San Francisco.
The Greater Bay Area’s response to the need for high-quality basic research is to build it, with four clusters of scientific institutions coming out of the ground in Guangzhou’s Nansha, Shenzhen’s Guangming, Dongguan’s Songshan Lake, and Zhongshan’s Cuiheng.
When it comes to technology, Guangdong has no worries about designing, building, and selling stuff. But there is a step before all of that in the tech industry’s value chain, and it is a step in which the province has traditionally been lagging. Basic scientific research is where Beijing and Shanghai have long had an edge, given the prevalence of their leading universities focused on scientific research.
It’s not as if the province lacks in academic spirit or ambition. There are some well-established innovation hubs in Guangdong, such as Guangzhou’s “Science City”, which has some of the world’s biggest R&D-focused corporate names established in its Huangpu district, or Shenzhen’s Nanshan Science and Technology Park, home to some of the country’s biggest tech brands. And the GBA masterplan has at its core the ambitious “10 hubs” plan to build China’s answer to Silicon Valley, known as the Science and Technology Innovation Corridor (STIC).
You might have heard about the ‘Innovation Corridor’ linking Guangdong’s tech hubs with Hong Kong. But what is it? Here we explain the basics of ‘One Corridor, Ten Cores, and Multiple Supporting Nodes.’ Forget Zhongguancun in Beijing; this is where ‘China’s Silicon Valley’ is being built.
As the masterplan of turning the nine cities in Guangdong as well as Hong Kong and Macau into an integrated technology hub unfolds, incubators and accelerators have been springing up around the region, all rushing to gain a foothold in the rise of China’s Silicon Valley.
Incubators, in the Western script, are companies staffed by experienced investors and executives that help startups by providing them with professional training, working space and venture capital. Accelerators are basically doing the same job, but focused on scaling up existing business models.
The landscape is rather different in China, where the central and local governments are dominant. Here, startup support services are established largely to facilitate the country’s economic development agenda laid down by the Party, and lines are always blurred in terms of the functions of incubators, accelerators and scientific laboratories.
The Greater Bay Area’s economic development model should not be other so-called “Bay Area” economies such as Tokyo, New York and San Francisco. It would be better to look at South Korea in the short term and Germany in the longer term. This is the view of Michael Enright, the Hong Kong University professor who is widely acknowledged as the leading international expert on the region’s development.
Speaking at an event organized by Amcham South China in Guangzhou today, Enright painted a bullish picture of the GBA’s future. When one looks at the resources available here, the connectivity that has been built between the region’s cities, and policy changes under way, he sees a unique opportunity for international investors. “The GBA will be a bellwether for the future of the world economy,” Enright said. “It will be at the center of the global economy. Not being here at this time. would be worse than having not been in Germany [in the post-war period].”
South Korea is the more rational choice for a role model in the near term, however, Enright said. Like that country, the GBA has an integrated economy where multinationals can locate: world-class finance and HQ operations, next to world-class R&D facilities; next to advanced manufacturing facilities; next to world-class logistics facilities; next to a consumer market of nearly 80m people. And now it is getting a turbo-boost from infrastructure development that is bringing travel times for goods and people into a range that will facilitate strong growth going forward.
Will the GBA double its GDP by 2030, or by 2035? The question is moot, Enright says. It will happen, just as it has happened everywhere else in the world that has faced a similar development path.
We will have a follow-up interview with the professor in the near future. In the meantime, check out his consulting company page .