Guangzhou, Foshan to build ‘trillion-plus’ zone

Guangzhou and Foshan are planning to jointly develop a new Greater Bay Area “hub” centered on the Guangzhou South Railway Station. The aim of the project is to create a cluster of new strategic industries, with input from Hong Kong and Macau, which will be valued at more than RMB 1 trillion.

The announcement of the project, which is grandly titled “South Station Area”, was made late last week but took a few days to be picked up by local media. Here are the basic facts:

  • Covering an area of 36.2 sqkm, the new zone will be centered on the Guangzhou South Station but will absorb the surrounding areas, which are currently a mixture of rural and urbanized neighborhoods;
  • Its inner core will cover 4.5 sqkm immediately around the station, which is where new commercial developments and high-end industrial projects will be built over the next five years;
  • Initial work will begin next year to acquire land and gain other necessary planning approvals before construction can begin;
  • The focus will be “international”, as companies with “strong competitiveness” will be nurtured to form industrial clusters.

The project will be built jointly by the two municipalities, though details of their exact contributions have not been clarified publicly. It will be a pilot zone for their cooperation and will stretch between Guangzhou’s jurisdiction of the existing station and Foshan’s Sanlong Bay area.

The project is believed to be the first of its kind inside the Guangdong part of the Greater Bay Area, in which two municipalities are formally conducting a joint venture on land running between them. As we have written previously, however, this is not the first time Guangzhou and Foshan have been collaborating on projects, and talk of integrating their “GuangFo” economy is constant in local media. Together, the two would be China’s biggest city economy by far, with a registered population of more than 22 million and annual GDP of nearly RMB 3.4 trillion.

Their choice of the Guangzhou South Station in the Panyu District didn’t require much thought. It is already the Greater Bay Area’s primary transport hub, with high-speed trains running down both sides: on the west bank to Zhuhai and Macau; on the east bank to Shenzhen and Hong Kong. These trains connect the three sides of the GBA’s triangle in a one-hour travel circle. It is also the biggest station in the province for trains coming in from the country’s interior.

What is surprising, perhaps, is the audacity: the region already has a masterplan for tech hubs, known as the Science and Technology Corridor, which runs from Guangzhou North down to Nansha (further south from Panyu), and across to Dongguan before turning southward to Shenzhen. This project would effectively be muscling its way into the masterplan, in a major, trillion-RMB, way.

The project is much more than a tech play, however. It will likely be raising eyebrows in Shenzhen, with its talk of modern service industries being welcomed from Hong Kong and Macau. It may even be raising concern in Guangzhou’s other districts, especially Nansha, where multi-dimensional masterplans have been put into action to create Greater Bay Area hubs.

Unsurprisingly, the plan’s thinkers have presented it in the usual win-win jargon. It proposes to “give full play to the advantages of location and transportation [in Panyu] and connect with the high-end industrial resources of Hong Kong and Macau”. And it is being pitched as a futuristic project, focused on a niche, not just any kind of technology: a cluster of “IAB” industries, which includes “new generation information and technology” (I), artificial intelligence (A) and bio-medicine (B) … with the added characteristic of tourism.

Tourism?

Yes, tourism. Panyu is already home to the Chimelong cluster of theme parks, which are Guangdong’s No. 1 tourist attraction.

Overview of the new zone around the Guangzhou South station.

Within this framework, here is what the new hub has in mind for its buildout:

1. Services headquarters in the ‘core area

This is where the Hong Kong and Macau companies would feel at home, according to planners. That is why a Guangzhou World Trade Town is being built: to attract high-end, internationally focused service industries.

2. Xiecun District’s Biomedical and Health Industry Group

This would include an “integration development demonstration zone”, shorthand for an experiment allowing companies to push the boundaries of cross-border collaboration, i.e., try new things that might not normally fly with national regulators. Expect to hear more of the Guangzhou, Hong Kong and Macau International Health Industry City (Panyu Park).

3. Weichong District’s Professional Services Group Headquarters

It’s unclear if this means professionals such as lawyers, accountants, etc, from all three jurisdictions, and whether they might be allowed to be as experimental as what is envisaged for the healthcare sector, but this is apparently where they will be clustered.

Gleaming new office buildings will go up where currently stand the old villages of Dazhou and Weichong.

4. Shibi Area’s Artificial Intelligence and High-End Equipment Industry group

There had to be an AI component to the plan. Say no more.

5. Pingshan Area’s New Generation IT Industry Group

This cluster is devoted to digital companies of the future, like Tencent.

6. Guba Area’s Lingnan Cultural and Creative Industry Group

This might sound like a plan for pushing more tourists into Chimelong’s safari park, circus shows, water slides, and roller coasters, but it’s apparently not. It is a cluster for “cultural creativity”, which can be a wide-ranging definition, including fashion design, media and other practitioners of “soft power”. (Lingnan culture means Cantonese.) The idea is to help transform traditional villages in the district.

Great Expectations

The project’s ambitions should not be underestimated. Some of its ideas are quite visionary, if at first they might sound like something out of left field. The Guangzhou World Trade Town, for instance, is envisaged as a kind of permanent trade fair, where trade representatives from all over the world would be stationed. Naturally, the Belt and Road Initiative would run through here.

It is unclear what impact this might have on the existing Canton Fair facilities in Pazhou, around a 30-minute drive to the north of Panyu.

The same goes for the project’s Greater Bay Area hub projections. Guangzhou is already working on recognizing professional qualifications from Hong Kong and Macau, which would hopefully attract reputable groups engaged in law, accounting, financial, consulting, human resources and others from the two SARs. The idea is that they would be allowed to directly register and provide professional services, like any local counterpart in the South Station Area.

It might be that the plan’s drafters had an inkling of what was coming last week when the Hong Kong and Macau Chief Executives went to Beijing for their coordination meeting with Vice Premier Han Zheng. The South Station Area plan talks a lot about cross-regional collaboration. Specifically, it envisages supporting Hong Kong’s various inspection and testing institutions in the new project by encouraging local enterprises to use them. It will also look closely at law firms’ ability to work across legal systems, and establish more joint-venture law firms in the South Station Area.

Stay tuned. There are likely many more details to come.

Read more (in Chinese):

City govt names six developments

Leju.com looks at the plans

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