Hengqin has launched an Intelligent Computing Center in cooperation with Beijing’s Cambricon Technologies, incubated by the Chinese Academy of Sciences. The new facility will provide advanced artificial intelligence solutions to “address urbanization challenges,” according to China Daily.
Hengqin has accelerated the building of an integrated communications infrastructure, following the Greater Bay Area masterplan. It includes a 100% fiber-optic backbone, free WiFi network, and big data-based cloud computing center that supports all public information systems.
Global economic uncertainty is having a limited impact on Hong Kong’s employment market, which is buoyed by the development of the Greater Bay Area, government incentives for innovation and technology and the completion of key infrastructure projects. This is according to KPMG, which released its third annual Hong Kong Employment Trends Survey and Salary Outlook this week. Highlights included:
72% of respondents working in C-level positions or in human resources said they planned to increase (35%) or maintain (37%) existing headcount
37% in financial services and 45% in innovation and technology said they would increase headcount, although the figure last year was higher (46%) for financial services
53% of respondents said they would consider working in other GBA cities, with Shenzhen, Macau and Guangzhou being the top three choices
The top four considerations for respondents to work in these three cities were higher pay (58%), better career and industry prospects (56%), broader work exposure (54%) and travel convenience (52%)
The top four industries in which respondents thought the GBA development would create more jobs were innovation and technology (46%), financial services (36%), professional services (31%) and trade and logistics (29%)
Recent KPMG analysis found tax incentives to be instrumental in facilitating the free movement of people within the GBA, especially for high-income individuals working within the region. In early 2019 various exemptions from China’s new personal income tax were introduced, allaying Hong Kong residents’ concerns over a reduction in post-tax income when working on the mainland.
Shenzhen-based Tencent Holdings, operator of China’s biggest video games and social media businesses, beat estimates to record a 17% year-on-year increase in first-quarter net profit, primarily driven by commercial payment, social advertising and digital content services.
The Hong Kong-listed tech giant posted a net profit of RMB27.2 billion (US$3.9 billion) in the quarter ended March 31, up from RMB23.3 billion in the same period last year and ahead of the RMB19.4 billion consensus from analysts compiled by Bloomberg.
Revenue grew 16% to RMB85.5 billion, compared with RMB73.5 billion a year ago, but fell short of the RMB88.7 billion consensus analysts’ estimate.
Hang Seng Indexes on Tuesday launched two new indices tracking the environmental, social and corporate governance performance of listed companies, along with a third index that tracks innovative companies in the Greater Bay Area, reports the SCMP.
CEO Vincent Kwan said that the company has not ruled out combining the environmental, social and corporate governance indices and Greater Bay Area into a new index if there is a demand from the market.
“We found that ESG and Greater Bay Area are concepts that have seen the strongest investor interest this year,” he said.
Shenzhen home sales in the secondary market touched a record high in April amid falling mortgage rates, population influx and a cyclical upturn in sentiment, according to SCMP.
Data from the Shenzhen Real Estate Information Platform showed that 7,570 homes changed hands on the secondary market in April, an increase of 66 per cent over the previous month and the highest monthly record since October 2016.
Prices were more subdued, however, rising 0.9 per cent monthly to reach RMB52,787 per square meter in April. Although mortgage rates have been lowered recently and Greater Bay Area euphoria has been evident, major factors constraining the market have not been loosened, including curbs on non-hukou holders and a three-year resale ban.
There was a time when the Greater Bay Area was known as the Pearl River Delta. That era ended officially on February 18 with the launch of the region’s masterplan by the State Council. Left behind was the region’s chief rival, the cluster of cities and provinces gathered around the mouth of China’s greatest river, known as the Yangtze River Delta.
It would appear that the Yangtze River Delta is being asked to catch up. On Monday, President Xi Jinping chaired a meeting of the Politburo at which it was decided to elevate the Yangtze River Delta’s development to a national-level strategy. According to China Daily:
China will bolster the integrated development of the Yangtze River Delta with measures to advance innovation-driven development and upgrade its industry chains, the Political Bureau of the Communist Party of China Central Committee decided at a meeting on Monday.
The integrated development of the Yangtze River Delta region must focus on the key elements of greater integration and high-quality development to lead the growth of the whole Yangtze River Economic Belt and East China, the statement said.
The YRD includes Shanghai and Jiangsu, Zhejiang and Anhui provinces. It had a GDP of 21 trillion yuan ($3.06 trillion) in 2018, which accounted for around one-fourth of the national total. That it almost double the size of the GBA’s economy. What it is still lacking, however, is a catchy name.
Sorry, YRD, Greater Bay Area is already taken.
What does this mean for the GBA? For a start, the two regions are actually incomparable. The YRD has a much larger population and, despite having free-wheeling Shanghai at its center, it is far more weighted toward state-owned enterprises. Perhaps most importantly, it doesn’t have a Hong Kong or a Macau, with independent legal systems and fully convertible currencies. But its leaders will surely lobby for favourable policies at the highest levels in Beijing. Which is fine. Our primary competitor is the US, in case anyone doesn’t know yet. The rise of the YRD should be win-win for the GBA.
April’s economic indicators were released yesterday by the National Statistics Bureau and, perhaps predictably, they sagged, after a strong Q1. Industrial production (+5.3%) and retail sales (+7.2) slowed, while exports, to no one’s surprise, went into negative territory (-2.7%). Fixed-asset investment continued to show resilience, at +6.1% YoY, but it was slightly down from the Q1 number and slightly missed analysts’ expectations.
The numbers worried reporters at the SCMP. Markets, however, didn’t seem to care, as the Hang Seng Index and Shenzhen A-Share Indices rose. Trump Tweet Fatigue may be the cause, but it may also simply be too soon to say.
Guangdong will report its numbers fairly soon, which will give a clearer idea of what the state of play is in the Greater Bay. For reference, the province increased its share of the national total in trade during Q1. We will look for a closer read on industrial production, retail sales, and fixed-asset investment when they are released.
Caixin Global has an interesting report out wrapping up how major investment banks are picking stocks worthy of consideration because of the Greater Bay Area masterplan unveiled recently by the State Council. Insurers such as Ping An, banks such as Bank of China (Hong Kong), and tech companies such as Tencent are among their top picks.
Ping An Insurance is headquartered in Shenzhen, listed on the Hong Kong stock exchange. It generates 18% of its premiums from Guangdong, the highest among its peers, according to DBS.
Both the Swiss-based UBS and the Singapore-based DBS picked Shenzhen-headquartered, Hong Kong-listed Tencent Holdings Ltd. DBS said it was because they believe favorable policies for fostering talent in the Greater Bay Area can increase the internet giant’s capacity for innovation.
In the property sector, UBS favored Guangzhou-based Times China Holding Ltd. and Shenzhen-based Logan Property, while DBS picked Hong Kong developer Yuexiu Property Co., China Resources Land Ltd., China Vanke Co., Guangzhou R&F Properties Co., Kerry Properties Ltd. and Shenzhen Investment Ltd.
DBS said Guangzhou-based automaker GAC Group and Shenzhen-based electric car maker BYD will get a boost as demand for automobiles is expected to rise with government investments into improving the GBA’s transportation network.
The region’s urbanization and infrastructure buildout will also boost cement producers China Resources Cement Holdings Ltd. and Anhui Conch Cement Co., and railway construction companies China Railway Construction Corp. and China Railway Group Ltd., DBS said.
Authorities in the Xiangzhou district of Zhuhai are considering a novel way to get people spending more time facing each other rather than their phones. They have proposed asking WeChat to ban messages from being sent to WeChat “working groups” during non-working hours.
According to the SCMP report, the proposal also suggests that workers should not randomly send messages or post emojis in the WeChat group unless it is related to important new information about the project.
The discussion went viral on the internet and struck a chord with Chinese netizens, most of whom said they were dealing with the same problem.
The ubiquitous WeChat has amassed 1 billion users since its launch eight years ago. The messaging app has come to dominate Chinese people’s daily lives by offering all sorts of conveniences from payment to travel to even file for divorce at the civil affairs authority.
Chinese employees, who have never really got acquainted with email, prefer to use WeChat on a computer where they can share assignments and contents or conduct group video conferences.
Shenzhen is ranked third in terms of business environment out of the top 100 cities in China, according to the latest report by the Beijing-based nonprofit economic think tank, Wanbo Institute.
The report assessed the cities’ soft power and was based on seven indicators: natural environment, infrastructure, technological innovation, talent, financial, cultural and living.
Shenzhen follows Shanghai and Beijing on the list, with Guangzhou, Nanjing, Wuhan, Hangzhou, Tianjin, Chengdu and Xi’an rounding out the top 10.
Shenzhen is ranked first, however, in terms of its overall environment. The city has achieved a good balance between economic growth and improvement of quality of life, according to the report. Shenzhen ranks first in terms of air quality among the 20 Chinese cities with the highest GDP.