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Unlocking the business potential within China’s Greater Bay Area
More than half of international businesses believe the Greater Bay Area (GBA) is set to experience higher growth than the rest of China, as revealed in our 2021 Navigator survey. This belief is especially strong across the APAC region, as 61% of Singaporean firms and 74% of Malaysian businesses make a similar prediction – as close neighbours, they can see for themselves the gathering momentum.
Despite being the youngest region in China, the GBA is already home to several leading global corporates, and financial institutions. In 2020, the Global Fortune 500 reported over 20 companies with headquarters in the GBA, and almost 100 financial institutions – banks, and securities and insurance – employing and nurturing around 13% of financial services talent nationwide.1 As a region not only rich in capital, but also in talent, it is extremely attractive for business growth prospects right now.
The GBA benefits from its ability to leverage the diverse strengths of its constituent cities, which are known on the world stage for innovation within technology, finance, advanced manufacturing, and hospitality.2 While Hong Kong is renowned as being an international finance hub, Shenzhen is a haven for tech and innovation, Macau is leading the way in tourism and leisure, and Guangzhou is often regarded as a manufacturing and trade centre.
But it’s not just what these cities can create and provide, it’s where they are and how they operate together that appeals to international businesses. The GBA’s unique infrastructure presents a golden opportunity of connectivity to China and the rest of the world. The Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) in particular, greatly shortens the traveling time between Hong Kong and Shenzhen, Guangzhou, and other cities, and enables greater footfall in the region. While the Liantang/Heung Yuen Wai Boundary Control Point land boundary crossing between Hong Kong and Shenzhen has helped to foster the flow of people and goods to further economic development in the GBA.
According to 37% of our international survey respondents, Hong Kong is the preferred entry point into the GBA.
Due to its access to global capital and professional services,3 Hong Kong has a growing talent pool and an advanced technology ecosystem. International markets have their favourite cities: France is Macau’s third largest supplier of goods and rated it second to Hong Kong as an entry point. Each city has their own long history of international trade and cultural relations that still hold some influence today.
Every one of the cities is attractive as the gateway to the GBA’s enviable supply chain for manufacturing – one of the most comprehensive in China. As 82% of manufacturing businesses will increase their supply chain footprint over the next 12 months, the area will form an integral part of the country’s expected organic growth.
The GBA’s rapid digitization is part of the continuing shift in China’s economic activity. This may be attributed to the rise of e-payments and digital transactions, as well as the expansion of e-commerce and video e-commerce, both of which have had a significant impact on the GBA’s society. Already dubbed ‘richer than Silicon Valley 4, the GBA’s GDP—currently at $2.2 trillion – is expected to more than double to $4.6 trillion by 2030, making it the highest GDP among other bay areas. Similarly, in the next decade its output is expected to exceed that of the San Francisco Bay Area and the New York Metropolitan Area combined.5
Businesses leaders have recognised the region’s expansion opportunities. Our survey reveals more than 3 in 4 (76%) international companies are planning some or significant expansion in the region over the next three years, with innovation and technology identified as the main investment priority. According to our survey, 31% of international businesses see the GBA as having a higher concentration of and better regarded research and development resources than anywhere else in the world.
Whether it’s thanks to Hong Kong’s strengths as an international capital and growing financial centre, or the region’s continued development of cutting-edge technologies, the GBA is poised to break new ground in enterprise research and development and innovation across a multitude of sectors.
The increasing talent pool and advancing technology ecosystem means the GBA will continue to grow as a national innovation hub.6 A hub not only with the ability to pull cities together, but to create ripples on a global scale.
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