Macau is to withdraw a controversial bill on the establishment of a sovereign wealth fund. The Macau Investment and Development Fund had been on track to take MOP60 billion, or 11% of the government’s financial reserves, for its establishment. Until yesterday, that is.
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.
Despite a contraction in bank lending to Guangdong’s real-estate market in Q2, property volumes and prices throughout the key GBA cities showed strength in the first half of the year as developers turned to alternative funding channels, latest provincial data shows.
According to the latest report by the provincial housing bureau, GBA cities diverged from the rest of the province between the first and second quarters. This was primarily due to the cost of capital. The eastern, western and northern regions of the province saw a rise in volumes but prices fell, while the nine cities of the GBA saw a rise in both volumes and prices.
Guangdong sold a total of 63.218 million sqm in property during the first half, down 3.7% year-on-year. Total contracted sales, however, were RMB888.76 billion, up 6.6% year-on-year.
The official data is in: Shenzhen grew the fastest (in real terms) in the first half of the year among the main cities of Guangdong. Despite being a trading-reliant economy, its GDP swelled 7.4%, after adjusting for inflation.
Chinese media were awash with glowing reports yesterday trumpeting a milestone in the Fortune 500 global rankings. For the first time, there are more Chinese companies on the list than American: 129 to 121. What we find most interesting on the list is the presence of 20 companies from the Greater Bay Area.
Below is a snapshot of how Chinese companies grew on the Fortune 500 over the past 20 years.Continue reading 20 GBA firms in Fortune 500
Sydney-based real estate venture capital firm Taronga Ventures has launched its RealTechX Growth Program, an industry-led, government-backed innovation program to grow real estate technology business in Australia and Asia, particularly in the Greater Bay Area.
Realtech or proptech represents the convergence of property and technology that reshapes the way real estate is built, occupied, managed, transacted and recorded. To Taronga, realtech also goes beyond residential and encompasses the office, retail, infrastructure, and urban planning sectors as well.Continue reading RealTechX to scale up proptech in GBA
The prestigious Fortune China 500 list has been released for 2019, with GBA companies standing out in measures of both revenues and profits. Shenzhen-based Ping An, which began as an insurer but is now more of a fintech firm, is the GBA’s leading light, ranking No. 4 in revenues and No. 6 in profits nationwide.
A total of 86 from the GBA made the top 500. Moreover, 12 of the top 40 most profitable were from the GBA.
Amid reports that a senior Politburo official is running a Hong Kong crisis taskforce in Shenzhen, the release today of an accelerated plan for GBA integration by the provincial government should come as no surprise. The standard response to any crisis of government legitimacy in China – since at least 1976 – is to throw out a bunch of carrots while wielding a big stick. Guangdong’s announcement today that it is accelerating the GBA’s integration looks to be trained on one priority: creating new growth opportunities for Hong Kong people and businesses. (The stick is still sitting patiently in its Tamar barracks.)
This being China, the newly updated plan looks largely indistinguishable from the old. But read between the lines, and it’s the intention that matters. The “three-year action plan” for the development of the Greater Bay Area includes 100 measures and nine key tasks. Its end-goal is actually next year, i.e. it started in 2017, before the GBA masterplan was even unveiled. Still, it makes for interesting reading in how it seems to be prioritizing and pushing harder on rolling out the welcome mat for international talent and investment.
All language is couched in the correct terminology, of course. In talking about the construction of an international science and technology innovation hub, the plan proposes 14 specific measures including the establishment of a comprehensive national science center, joint laboratories with Guangdong, Hong Kong and Macau, and the construction of a “science and technology innovation corridor” that connects Guangzhou, Shenzhen and Hong Kong.
Where a greater sense of urgency comes through is in sections related to the accelerated flow of capital and “talents”. Guangdong will: 1) Introduce specific policies and measures to support Hong Kong and Macau institutions of higher learning and scientific research institutions to participate in the province-funded science and technology plans; 2) Establish a basic research fund open to Guangdong, Hong Kong and Macao enterprises; 3) Open provincial research facilities to participants from Hong Kong and Macau; 4) Establish trial zones for foreign “innovative talents” to enjoy the same treatment as Chinese nationals in building scientific and technological enterprises; 5) Obtain national approval for the usage of medical data and blood samples required for Guangdong, Hong Kong and Macau scientific cross-border research cooperation projects in selected universities, research institutions and laboratories.
By 2020, i.e., six months from now, the GBA will have 200 R&D institutions, with the region’s total R&D budget accounting for 2.8% of the GDP. There will be 2.6 patents per 10,000.
The provincial government has also proposed 10 measures to facilitate innovation, including nurturing strategic emerging industries, building advanced manufacturing industry clusters, and building an international financial hub together with Hong Kong and Macao. By 2020, 60% of the region’s economy will be in services.
The plan also set specific targets and measures for livelihood issues including infrastructure, environmental protection, education and medical care.
Among them, there are a total of 22 measures focusing on building a quality living and business circle. For example: 1) Support Hong Kong University of Science and Technology and other Hong Kong and Macao universities to open new campuses in Guangdong; 2) Establish a GBA university; 3) Take the lead in implementing a better talent retention policy; 4) Trial a new employment-based migration policy in the region; 5) Develop tax incentives for overseas (including Hong Kong, Macau and Taiwan) talents; 6) Build Hong Kong and Macau youth innovation and entrepreneurship bases; 7) Relax restrictions on the use of Hong Kong and Macau drug and medical devices.
Transport upgrades are a key component of the plan. By 2020, annual passenger throughput of airports in the GBA will reach 140 million, while the annual container throughput in ports will reach 62 million TEU. By 2020, the area will have 2,400 kilometers of rail transit and 5,000 kilometers of expressway mileage.
The environment is giving a top priority, too. By 2020: 1) Black and odorous water bodies in the urban areas of the GBA will be eliminated; 2) Prefecture-level cities (the big nine) will reach 90% of days with good air quality, and the annual average of PM2.5 concentrations will not be more than 34 micrograms per cubic meter; 3) Sewage treatment rate will be 95%; 4) Forest coverage will be 52%.
Foreign investors are clearly going to be given a high priority. The plan says Guangdong will focus on accelerating a “new kind of opening up and cooperation.” This will involve: 1)
Deepening reform of the business environment by building the Guangdong Free Trade Zone with “high standards”; 2) Fully liberalizing (i.e., equalizing) the business landscape for Hong Kong and Macau individuals; 3) Promoting the expansion of mutual recognition of professional qualifications; and 4) Actively participating in international economic cooperation and other initiatives. More specifically: By 2020, the time needed for filing foreign investment outside the negative list will be reduced to less than one working day, and the time needed for starting a business will be controlled within four working days.
The three star zones get renewed attention: Shenzhen’s Qianhai, Guangzhou’s Nansha and Zhuhai’s Hengqin.
As covered in yesterday’s news, the Guangdong government is pushing new credit toward SMEs in different sectors. One way of doing this is to make cheaper loans available to companies in need of “technological upgrading”. Such companies would be following a well-worn path. As we reported recently in another news item, Guangdong companies have spent xdxx over the past xx year on upgrading. In fact it could be said that the story of the GBA is the story of a region that is constantly engaged in the never-ending process of technological upgrading.
Nevertheless, sometimes it takes the China Daily to make crystal clear what the government’s priorities are. And so we read today that: “As the shadow of escalating Sino-US trade tensions looms over China, tech companies in the Greater Bay Area have been accelerating their upgrades to innovation and technology.”
“Onshoring” is a game two can play, the state-run media group seems to be saying, pointing out that Hong Kong robotics startup, Roborn Dynamics, has shifted its market focus from the US to the mainland.
It’s not just in production, but research as well. Hong Kong-based unicorn SenseTime has been “adhering to independent R&D in artificial intelligence”, it says.
Shang Hailong, the company’s managing director, encapsulates the prevailing sentiment in suggesting the region should: “ Further deepen the collaboration of enterprises, universities and research institutions to drive the innovation and technology companies forward and turn the crisis into opportunities.”
George Leung Siu-kay, an adviser of the HSBC’s Asia-Pacific business, said on an HSBC forum that the US-China trade dispute could speed up the development of the Bay Area, as China will focus more on domestic consumption to drive the country’s economy and the region could be a strong momentum for the economic growth.
We couldn’t agree more.
British business associations have formed a network with other international groups to maximize opportunities arising from the Greater Bay Area’s development plan, reports the South China Morning Post.
The chamber said in a statement that they, together with the chambers in Guangdong and Macau, the China-Britain Business Council, and the Confederation of British Industry Beijing Office, agreed to form an inter-organisation working group on the GBA initiative.
The platform, which appeared to be the first among major Western countries in the development zone, would work to identify opportunities in fields including construction, engineering, financial services, transport and health care for British companies. It will also work together to develop policy recommendations to governments and regulators across the region.