GBA Digest series of perspectives Issue 3
GBA Digest is a new quarterly series of perspectives brought to you by the Deloitte China GBA Center of Excellence with a focus of financial services industry.
2022 marks the 25th anniversary of Hong Kong's return to the motherland, as well as the fifth year since the signing of the Framework Agreement on Deepening Guangdong-Hong Kong- Macao Cooperation in the Development of the Greater Bay Area. Today, with ongoing challenges from the pandemic and geopolitics, technology and innovation are top priorities in accelerating the transformation of the Greater Bay Area (“GBA”) into a world-class bay area. This new era of technological evolution and digital transformation also presents new opportunities and challenges.
In this issue of GBA Digest, we first look back to 2021, when the GBA’s economy surged. Shenzhen’s GDP exceeded RMB3 trillion, Dongguan GDP broke the trillion yuan mark for the first time, and Hong Kong's economy showed its vitality with GDP growth of 6.4%. Add in Guangzhou and Foshan, these five cities together form a "trillion dollar economic circle" in the GBA.
We then look ahead to the rest of 2022, positing a relatively optimistic view of China's overall economic prospects. There are favorable factors such as the Regional Comprehensive Economic Partnership Agreement (“RCEP”) that will benefit the GBA growth, although COVID-19 remains an ever-present challenge. Hong Kong looks set to become a more attractive financing location for technology and innovation companies; and the Hengqin Plan, Qianhai Plan, and Northern Metropolis Development Strategy should enhance the opening-up and innovation vitality in the GBA’s services sector.
The market-driven innovation powered by the private sector is the most outstanding advantage of the GBA. The strength of the Shenzhen-Hong Kong-Guangzhou technology cluster is now even more prominent, ranking second in the World Intellectual Property Organization’s Global Innovation Index 2021. As technology and innovation capacity improves, technological and industrial innovation hubs including Qianhai in Shenzhen, Hengqin in Zhuhai, Nansha in Guangzhou, and the Shenzhen-Hong Kong Innovation and Technology Cooperation Zone at the Lok Ma Chau Loop are forming an innovation value chain in the GBA.
However, while the technology and innovation industry in the GBA moves towards a new journey of deeper development, it is important for us to explore how to strengthen cooperation and synergy between GBA cities to stimulate greater growth in the innovation sector.
This issue of GBA Digest explores how this will be driven by upgrading technology and innovation partnerships and developing digital platforms.
Last but not least, joining Shenzhen, Zhuhai and Guangzhou, the Guangdong-Macao In-depth Cooperation Zone in Hengqin has recently launched the Qualified Foreign Limited Partnership (“QFLP”) pilot scheme effective at the end of January 2022. With venture capital as an important driver of technology and innovation development, QFLP policies are set to further open up cross-boundary, two-way investment to provide high-quality financial support for technology and innovation businesses in the GBA. Featured in this current issue, we are happy to bring you our expert point of view about the policies under the QFLP pilot in Hengqin.
What is past is prelude. Despite ongoing challenges, the GBA’s prospects remain bright.
3rd GBA Digest Key topics:
The Trillion Yuan Economic Corridor: Assessing the Greater Bay Area’s Economic Outlook for 2022
It’s time for tech innovation capabilities across the GBA to soar despite headwind
Guangdong-Macao In-Depth Cooperation Zone in Hengqin to pilot QFLP scheme