Page 70 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
trade. Even though these free trade zones in China Greater Bay Area
have the support of the Central Government, clear and
long-term results will have to be seen. Many (foreign) The Guangdong-Hong Kong-Macao Greater Bay Area
entities are already registered in the zones, but are not refers to the city cluster formed by nine cities in the Pearl
always experiencing clear effects and/or benefits. New River Delta, including Guangzhou, Shenzhen, Foshan,
regulations are under strict control of the government. A Dongguan, Zhuhai, Huizhou, Zhongshan, Jiangmen and
government steering a huge economy. The government Zhaoqing, as well as the special administrative regions of
is looking careful at the results of FTZ’s and is slowly Hong Kong and Macao. The GAB is an updated version
implementing new procedures and rules, both in the of previous regional development initiatives, such as
FTZ’s as well as in Mainland China (What Are). the Pearl River Delta and the Pan-Pearl River Delta, and
transcends regional divisions to highlight economic
Nevertheless, China is facing both opportunities and growth efficiency in the hub as a whole. By the end of
challenges. Opportunities are increasingly prominent 2016, the city cluster had a resident population of nearly
since bilateral FTZs have been gradually expanded, 68 million and a gross domestic product of nearly US$1.4
providing important opportunities for the all-around trillion. The region registered a GDP growth rate of 7.9
upgrading of China’s FTZ strategies and proving beneficial percent which was higher than the Tokyo Bay Area, New
for China to bypass the trade transfer effects caused by York Bay Area and San Francisco Bay Area in 2016. With
the integration of other regions and for solidifying the tertiary industries accounting for 62.2 percent of the
achievements of East Asian cooperation. However, the total economic activities, technology and innovation,
Chinese FTZ strategies will also face severe challenges. financial services as well as manufacturing are poised
The standards of trade liberalization will become higher to be the leading industry segments in the 11 cities.
than those in the past agreements and China will face However, there are certain hurdles that need to be
prominently increasing pressure to open its market and tackled for forging regional economic integration. Rising
make harder negotiations. Trade transfer effects will have land cost is evident in the GBA and this has significantly
great impact on trade and investment activities. China affected manufacturing industries. A research report
should move faster to build free trade zones through the on comparative studies of the Tokyo, New York and San
following major measures. In a bid to achieve China’s FTZ Francisco bay areas and the GBA, compiled by the CASS
strategic goals, the following efforts should be made for National Academy of Economic Strategy and the Institute
now and in the future: China should deepen the reform for SunYat-sen Studies, showed that the latter is becoming
of foreign-related economic systems, improve steadily an emerging economic influence. The report said
the liberalization standards of FTZ negotiations and southern China’s Greater Bay Area ranked third in terms
refer to international experiences through systematic of overall influence, after San Francisco and New York,
research and learning. The State Council should focus and first in the economic influence category. However,
more on the new agendas of FTZ negotiations, accelerate it ranked lowest in livability, and third when it came to
relevant research and formulate scientific and feasible cultural and tourism factors. The report called for further
rules of origin according to the different conditions of the efforts to increase innovation and entrepreneurship
countries involved in negotiations. The authorities should at colleges and stimulate the growth of SMEs in the
keep close attention on sensitive and advantageous greater bay area. The area also needs to improve public
products and adopt flexible measures accordingly. service infrastructure, protect the environment and
China should lower the costs of market opening and increase cultural attractions (Ecns.). The area also faces
structural adjustment to the maximum. Integration of other challenges aside from cost. GBA development not
decisions and internal coordination should be improved only requires central government policy support, but
in FTZ negotiations. China also needs to enhance foreign also cooperation among regional authorities. From the
economic cooperation and exchanges, and improve the beginning of the project, it was essential for all of the
fundamental work including building supporting systems regional authorities to coordinate with each other on
for free trade zones and fostering talents to propel the how to bolster GBA development (Chan, Enhanced).
implementation of FTZ strategies (Zhao).
The outline of the development plan for GBA was
officially announced on Feb 18, 2019.
70
trade. Even though these free trade zones in China Greater Bay Area
have the support of the Central Government, clear and
long-term results will have to be seen. Many (foreign) The Guangdong-Hong Kong-Macao Greater Bay Area
entities are already registered in the zones, but are not refers to the city cluster formed by nine cities in the Pearl
always experiencing clear effects and/or benefits. New River Delta, including Guangzhou, Shenzhen, Foshan,
regulations are under strict control of the government. A Dongguan, Zhuhai, Huizhou, Zhongshan, Jiangmen and
government steering a huge economy. The government Zhaoqing, as well as the special administrative regions of
is looking careful at the results of FTZ’s and is slowly Hong Kong and Macao. The GAB is an updated version
implementing new procedures and rules, both in the of previous regional development initiatives, such as
FTZ’s as well as in Mainland China (What Are). the Pearl River Delta and the Pan-Pearl River Delta, and
transcends regional divisions to highlight economic
Nevertheless, China is facing both opportunities and growth efficiency in the hub as a whole. By the end of
challenges. Opportunities are increasingly prominent 2016, the city cluster had a resident population of nearly
since bilateral FTZs have been gradually expanded, 68 million and a gross domestic product of nearly US$1.4
providing important opportunities for the all-around trillion. The region registered a GDP growth rate of 7.9
upgrading of China’s FTZ strategies and proving beneficial percent which was higher than the Tokyo Bay Area, New
for China to bypass the trade transfer effects caused by York Bay Area and San Francisco Bay Area in 2016. With
the integration of other regions and for solidifying the tertiary industries accounting for 62.2 percent of the
achievements of East Asian cooperation. However, the total economic activities, technology and innovation,
Chinese FTZ strategies will also face severe challenges. financial services as well as manufacturing are poised
The standards of trade liberalization will become higher to be the leading industry segments in the 11 cities.
than those in the past agreements and China will face However, there are certain hurdles that need to be
prominently increasing pressure to open its market and tackled for forging regional economic integration. Rising
make harder negotiations. Trade transfer effects will have land cost is evident in the GBA and this has significantly
great impact on trade and investment activities. China affected manufacturing industries. A research report
should move faster to build free trade zones through the on comparative studies of the Tokyo, New York and San
following major measures. In a bid to achieve China’s FTZ Francisco bay areas and the GBA, compiled by the CASS
strategic goals, the following efforts should be made for National Academy of Economic Strategy and the Institute
now and in the future: China should deepen the reform for SunYat-sen Studies, showed that the latter is becoming
of foreign-related economic systems, improve steadily an emerging economic influence. The report said
the liberalization standards of FTZ negotiations and southern China’s Greater Bay Area ranked third in terms
refer to international experiences through systematic of overall influence, after San Francisco and New York,
research and learning. The State Council should focus and first in the economic influence category. However,
more on the new agendas of FTZ negotiations, accelerate it ranked lowest in livability, and third when it came to
relevant research and formulate scientific and feasible cultural and tourism factors. The report called for further
rules of origin according to the different conditions of the efforts to increase innovation and entrepreneurship
countries involved in negotiations. The authorities should at colleges and stimulate the growth of SMEs in the
keep close attention on sensitive and advantageous greater bay area. The area also needs to improve public
products and adopt flexible measures accordingly. service infrastructure, protect the environment and
China should lower the costs of market opening and increase cultural attractions (Ecns.). The area also faces
structural adjustment to the maximum. Integration of other challenges aside from cost. GBA development not
decisions and internal coordination should be improved only requires central government policy support, but
in FTZ negotiations. China also needs to enhance foreign also cooperation among regional authorities. From the
economic cooperation and exchanges, and improve the beginning of the project, it was essential for all of the
fundamental work including building supporting systems regional authorities to coordinate with each other on
for free trade zones and fostering talents to propel the how to bolster GBA development (Chan, Enhanced).
implementation of FTZ strategies (Zhao).
The outline of the development plan for GBA was
officially announced on Feb 18, 2019.
70
