Opportunities in the Greater Bay
Imagine if you found an export market that had a GDP the size of Australia and was expected to grow to three times that size in the next decade. A market with an increasingly wealthy middle-class who travel frequently and are developing a taste for international products. A market with some of the best logistics capabilities in the world and where recent infrastructure investment will further improve the flow of goods and the flow of the over 70 million people that live there.
That’d be a pretty attractive market, right?
Welcome to the Greater Bay Area in southern China.
Previously known as the Pearl River Delta, the Greater Bay Area is more than a simple re-branding exercise. Under the umbrella of the Belt and Road Initiative the region is focused on being a world leader in a number of sectors including: technology and innovation, new industry development, tourism and international cooperation.
Including cities like the technology, financial services and logistics centres of Hong Kong and Shenzhen, the advanced manufacturing mega-city of Guangzhou and lesser-known outposts like Dongguan, Foshan and Zhuhai — plus China’s casino capital of Macau — the region is already an economic powerhouse. However, with significant infrastructure developments about to come online along with large-scale investment in areas like robotics and artificial intelligence further rapid growth is expected.
This year the opening of the new express train between the mega-cities of Hong Kong and Guangzhou will cut travel time to a meagre 50 minutes. Around the same time the engineering feat that is the Hong Kong-MacauZhuhai bridge will mean those cities will also be a one-hour commute from each other. For New Zealand the opening of an increasing number of direct flight links to
Guangzhou, Shenzhen and Hong Kong has made the region increasingly accessible in the past two years, giving no excuse to fly over the region on the way to the brighter lights of cities like Shanghai.
It’s been pleasing to see a number of New Zealand companies taking advantage of this connectivity and bringing further weight to the existing presence of companies like Mainfreight, Gallagher Security and Comvita who already have their Greater China headquarters in the Greater Bay Area.
It won’t all be smooth sailing to get the region more integrated. There are big questions over how the three quite distinct administrative and legal systems of Hong Kong, Macau and mainland China will work together and significant questions about what the mainland government will do with regard to restrictions on capital flow. However, with the growth expectation for the region we do see more New Zealand companies looking at the region as a serious option for expansion and even a city like Hong Kong, that is generally well-known to New Zealand business, is getting a fresh look.
As the home to over 142,000 highnet-worth-individuals and with over 40 million visitors from the mainland each year Hong Kong is already an attractive city-market in its own right and the additional connectivity is bound to make it even more attractive. And that’s just one of three mega-cities in the Greater Bay Area.
Glen Murphy is the Regional Director for Greater China for NZ Trade & Enterprise (NZTE)