Understanding China: GBA integration gathers pace

29 April 2021

Guangdong, where the Greater Bay Area (GBA) is located, has demonstrated a strong rebound amid the pandemic. In 2020, the coastal province’s GDP was greater than that of Singapore, Hong Kong, and Taiwan combined, marginally surpassing GDP of South Korea, Asia’s 4th largest economy. GBA is expected to take an even more prominent role in driving China’s growth in upcoming years under the latest Five-Year plan. The province will leverage the comparative advantage of its leading cities, Shenzhen, Guangzhou, and Hong Kong, to realise the full potential of GBA and deepen the connection to the world.

Shenzhen is seen as the future global capital of innovation, facilitating breakthroughs in core technologies. The plan involves nurturing seven strategic emerging industries – information technology, high-tech equipment manufacturing, green and low-carbon, biological medicine, digital economy, new material and marine economy. These industries currently account for 40% of Shenzhen’s GDP, and their share is expected to increase in the next years.

Guangzhou, on the other hand, is envisioned as an international transport and commerce hub. Its Guangzhou Baiyun International Airport is already the world’s busiest passenger airport in 2020 with further plans for expansions later this year. At the same time, 15 intercity railway projects are planned for construction, covering all major cities in the area with 5,700km of railway by 2035.

Finally, Hong Kong is expected to strengthen its role as an international financial hub through five mechanisms 1) New Economy listing, attracting global IPO activity, 2) Trade finance opportunities for various segments, supporting robust export activity, 3) Further easing of capital control in the region and developing eRMB, facilitating province integration and cross-border transactions, 4) Upcoming Wealth Connect and Southbound bond connect, encouraging diverse investments, and 5) Green financing, differentiating the city from its competitors.

Read the full article on the DBS website

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