Greater Bay Area set to lead recovery
With COVID-19 vaccination programs rolling out in different countries, the global economic and business environment is expected to start improving in the second half of this year. But China has already shown a more apparent growth momentum and is set to lead the economic recovery of Asia and even the world.
In all this, the Guangdong-Hong Kong-Macao Greater Bay Area is expected to play an even more important role in connecting China to the overseas markets.
Recently, China has reached a number of trade agreements, including the Regional Comprehensive Economic Partnership, the largest free trade agreement, and wrapped up negotiations on the EU-China Comprehensive Agreement on Investment.
In fact, China has already ratified the RCEP agreement. The RCEP member countries account for up to one-third of global gross economic output and trade volume, and once the CAI is signed, it will likely reinforce China's ties with the European Union.
These new trade deals will significantly shift the flow of world trade and enhance regional connections between China and Eurasia. And as the policies of the Greater Bay Area are further implemented, its role in supporting China's opening-up will become even more important, facilitating cross-border trade and capital flows in the region.
GBA draws cross-border e-commerce companies
The Greater Bay Area has become China's e-commerce industrial base. Market data show China has more than 3.78 million e-commerce-related companies, of which nearly 20 percent are located in Guangdong province, more than any other province in the country.
Guangdong is also home to 68 percent of the 570,000 cross-border e-commerce-related companies in China, reflecting the geographical and policy advantages of the Greater Bay Area in cross-border e-commerce.
The COVID-19 pandemic has dealt a heavy blow to a wide range of industries. But the cross-border e-commerce industry has been growing exceptionally well because more and more retail customers are shifting to online consumption.
As the global economy gradually recovers, global trade will see a sharp rebound, which will benefit cross-border e-commerce enterprises and stimulate economic activities in the Greater Bay Area, while enhancing connections between the area and other regions.
Leading green financial center in the region
On the environmental front, the Organization for Economic Co-operation and Development has forecast that, in order to achieve the emission reduction targets set in the Paris Agreement, the world will need to invest $6.9 trillion in green infrastructure every year up to 2030－with emerging Asia alone needing to invest $1.7 trillion every year.
As an international financial hub, the Hong Kong Special Administrative Region will play an important role in financing and raising capital for such green projects in Asia, especially the Greater Bay Area, further raising its global standing and boosting its socioeconomic development.
Last year, Canvest Environmental Protection Group Co Ltd, the largest waste incineration power generation company in the Greater Bay Area, obtained a HK$2.5 billion ($321.91 million) syndicated loan with the help of Standard Chartered Hong Kong to fund its new waste incineration power generation projects and expand its business in Southeast Asia and South Asia.
Instead of the conventional landfill approach, the Canvest group uses harmless incineration methods to dispose of waste, and turns it into a resource for energy. This not only helps save land resources but also promotes broader green economic development.
As the Asian region is promoting sustainability and low-carbon transition, Hong Kong will play an important role as an international sustainable finance center and unleash the huge potential of debt and project financing opportunities in the Greater Bay Area.
A recent market wealth report shows that four out of every 10 cities in China with most households that have more than 6 million yuan in assets are located in the Great Bay Area. And if all the cities in this area were combined, there would be 1 million of such affluent families, surpassing Beijing and Shanghai, which are at the top of the list, and reflecting the enormous potential of the wealth management market in the area.
As the Great Bay Area's economy continues to thrive, people's assets in the area are expected to increase further, boosting the demand for wealth management. And after the Chinese mainland-Hong Kong border is reopened, the flow of people, goods and capital will gradually return to normal, facilitating the development of different "connect" schemes, including the Wealth Management Connect and Insurance Connect, in the Greater Bay Area, and promoting the wealth management business in the region.
In fact, the Standard Chartered Greater Bay Area Business Confidence Index compiled by our research team also shows that business confidence has been rising in the Greater Bay Area despite the impact of the pandemic on the global economy.
The total population of the Greater Bay Area is expected to increase from the current 70 million to 100 million by 2035, when per capita GDP is likely to exceed $50,000. So, for companies in Hong Kong and other parts of the region looking for growth opportunities, the Greater Bay Area should be a preferred choice, with companies that take swift actions possibly benefiting from "first-mover" advantage.
Human capital is essential element
Human capital will play a vital role in fully unlocking the potential of the Greater Bay Area. Many companies and institutions, including Standard Chartered, are participating in the Hong Kong SAR government's Greater Bay Area Youth Employment Scheme. Some have also launched their own recruitment and internship programs to nurture future talents and help youths to widen their horizons and look for career development opportunities in the region and beyond.
As the central government strives to develop the Greater Bay Area into a world-class city cluster as part of its long-term development strategy, we expect it to play a more crucial role in supporting China's further reform and opening-up, creating enormous opportunities also for the other markets in the Asia and the world.
The views don't necessarily reflect those of China Daily.
The author is CEO, Greater Bay Area, Standard Chartered.