The Greater Bay Area is the right thing for Hong Kong and China – if it has all the right connections
- If the Greater Bay Area has uniform pricing in key areas, a smart permit system and fast train links, it will be a benefit to all involved – Hong Kong included
The bay is an overwhelmingly good idea, even though there is no doubt that it is an effort to keep the Hong Kong powerhouse in check. We are the biggest and by far the richest economy in the bay with just over 10 per cent of the people; educated, trained and globally connected, we are a great resource for China.
China needs a closer Hong Kong as a gateway to the world – increasingly important as China battles a toxic reputation for protectionism and lack of copyright reputation. It certainly has overtones of political ingress by the “one country” into the Hong Kong system. Guangzhou, too, will be worried about closer links lifting Hong Kong to the top of the bay. Then again, the sovereign power comes from Beijing and we’d all better get used to it.
It works both ways. Hong Kong will only be useful as China’s gateway to the world if its current rule of law, free flow of information, relative freedom of speech and open capital account are preserved. Cut that and you cut the neck of the golden goose.
Conurbations around the world like London, New York and Tokyo have vast commuting links. The rich live in the city and the country and the middle class in the suburbs; Bedford, New Jersey and Takasaki. And a developing city needs the low-paid: the bay has cheaper property.
There are many systems, porous borders and economic dependencies that connect countries and territories around the world. Monaco and Geneva straddle borders with different tax rates and the economics of living in a more taxed neighbourhood can be worked out to make things easier for commuters.
Andorra is run by two princes – a Catalonian bishop and the French president – but has its own laws and government under their heads of state. Monaco is a sovereign principality that is not a member of the European Union but uses the euro. Monaco’s French border runs down the equivalent of Robinson Road – almost impossible to see except on a map. All have different systems within a closer economic union. It’s been done before.
It is true that 70 million people will want to come to Hong Kong, but the permit could limit excessive tourism while encouraging people to discover more about the other side of the bay. Some Hong Kong travellers might find they like to live on the mainland – even more so if property rights were made more secure and Google was allowed.
Another easy move would be to make smartphone costs the same throughout the bay area, something that has brought the continent of Europe together far more than the bullying European Commission. Consolidating transport tickets to allow travellers to arrive and go would be another cheap and easy move.
Somewhat more long-term (and costly) is the need to build fast commuter through-train links. Hong Kong will have to be connected by non-stop commuter lines through Shenzhen to Zhongshan, Foshan, Dongguan and Guangzhou. That needs to start now to meet the 2035 benchmark.
Hong Kong was originally established in 1841 as a gateway to China and the bay is a natural evolutionary process – but we can be sure the central government won’t go too far. The bay has too many economic advantages that Beijing does not. If the bay were truly successful, it would become a significant competitor to the capital. That could be an interesting conundrum for the State Council in 2035.
Richard Harris is chief executive of Port Shelter Investment and a veteran investment manager, banker, writer and broadcaster, and financial expert witness