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Shenzhen-Hong Kong Cooperation Roundtable held its third meeting on the Greater Guangdong Hong Kong Macau Bay Area

Author: Source: Date:2016-10-14
The government work report this year promotes the deepening cooperation between mainland and  the two SARs, Hong Kong and Macau, and fully utilizes the advantages of Hong Kong and Macau to designate the development plan of the greater Guangdong Hong Kong Macau bay area. The third meeting of the SZ-HK Cooperation Roundtable was thus held in such context, seeking new opportunities in the development of the greater bay area. Experts drafted eight policy recommendations for the development of the greater bay area. 

First, be open-minded and fully utilize the institutional benefits of the One Country Two Systems policy mechanism. Under such mechanism, the greater bay area harbors three independent customs territories. Institutional obstacles to the equal distribution of resources and factors of production remain the primary problem even among the nine cities in Guangdong province, let alone among Hong Kong, Macau and Guangdong where vast institutional differences prevail. Although there have been series of trade agreements since the ratification of the Mainland and Hong Kong Closer Economic Partnership Arrangement, the differences in institutions, legal systems, administrative regulations, evaluation and monitoring mechanisms as well as business culture lead to frictions in the socioeconomic integration within the region. It is thus critical to shatter administrative and institutional barriers, and suffice it to say, to replace preferential institutions with innovative institutions. More efforts should be put into institutional reform to overcome the institutional obstacles in finance, trade and exchange, and to break the barriers in business environment, flows of factors of production and public service provision. 

Second, push for further liberalization, construct a free trade zone of Guangdong, Hong Kong and Macau, construct a pilot zone for open economy. As the government work report anchors on the special position and function of Hong Kong and Macau in the country’s economic development and opening up, we suggest that the development plan for the greater bay area should work alongside the Belt and Road Initiative to promote the construction of a free trade zone and a new pilot zone for open economy in the area. 

Third, establish a coordinating mechanism to promote the coordinated and orderly development of cities within the greater bay area, and to enhance the region’s global competitiveness. Competition shifts beyond cities to that among regions and city clusters. It is thus essential to strike a better coordinated development mechanism within the greater bay area that identifies the comparative advantages of each city involved and position each city accordingly. 

Fourth, deepen cooperation between Shenzhen and Hong Kong to build an economic community as the engine for the development of the greater bay area. The past decades have witnessed the critical role of the cooperation between Shenzhen and Hong Kong in the economic development of the region. In the context of the development of a greater bay area, Shenzhen and Hong Kong should continue to take up the pioneering role to explore the possibility of transforming the institutional advantages of Hong Kong’s open economy and legal system to a comparative advantage in global competition. Based on the Qianhai Free Trade Zone and Lok Ma Chau loop as an innovation and technology park between Shenzhen and Hong Kong, the cooperation of the two cities should ultimately build up a world’s leading center for financial services, shipping and logistics, and technology in order to optimize the industrial structure of the greater bay area.
Fifth, accelerate the development of the Lok Ma Chau loop to construct a cutting-edge corridor for technological innovation in the greater bay area. With the Shenzhen Innovation and Technology Zone to the North, the Kwu Tung North/Fanling North New Development Areas to the South, and the Futian Free Trade Zone adjacent to the Lok Ma Chau loop, the joint project is aimed to construct a technological innovation corridor and to bring mutual benefits to the two cities. 

Sixth, deepen financial cooperation and construct a world’s leading innovative financial center. We suggest that emphasis be put on the interconnectivity of financial services within the greater area to diversify the sources of financing.

Seventh, reposition and utilize the Pearl River to construct a golden waterway in the greater bay area. The transportation networks within the greater bay area is well-developed with three international ports, railway and highway networks. Nevertheless, the Pearl River that connects Nansha, Shenzhen and Hong Kong, has not yet received much attention. We believe that the breakthrough point in the development of the greater bay area rests on transportation, notably the management of shipping in the Pearl River. Therefore, we suggest to include the management of the Pearl River into the development plan of the greater bay area to promote a coordinated, scientific governance of the golden waterway. 

Eighth, build pilot zones to reduce institutional obstacles in basic public services provision across the border to share, and to build the community collaboratively. The development of the greater bay area should go beyond economic development to cover the public goods provision to its residents. We suggest to enhance cooperation in transpiration, communications, energy and other infrastructure industries to lower the transaction costs, and to share the benefits of the development of the greater bay area with residents through the provision of better and more equal education opportunities, accessible and affordable healthcare, as well as other public services.