Page 8 - The South China Business Journal
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will make it easier for middle-class consumers to escape the cities within the region by focusing more on their
to Macau and Zhuhai for the weekend. competitive advantages and unique strengths, to create
a system in which each city is able to complement one
Other projects in the pipeline will also help the another”. In turn, this will help maximize synergies
region to move up the value chain. The Guangdong between the cities.
Free Trade Zone will make the region more open to
international investment in the targeted industries. However, the region will have to overcome silos
Further to this, in January 2017 China and Hong Kong between cities, especially those between Guangdong
agreed to build the Lok Mau Chau Loop Technology province, Macau, and Hong Kong. Currently, the
Park. Located in Hong Kong right on its border with region is less integrated than the European Union
Shenzhen, the park will allow Hong Kong to tap into (EU). “A successful GBA project,” Manunza said, “will
Shenzhen’s booming innovation and startup ecosystem only arise when each single city in the region is able to
whilst also retaining Hong Kong’s strong legal system prioritize the Bay Area’s benefits over individual ones.”
and business environment.
For example, several sectors in the Chinese mainland
The initiative will have international impacts beyond are still closed to investment from Hong Kong despite
the GBA, as the region is located on the maritime the signing of the Closer Economic Partnership
section of China’s ambitious Belt & Road Initiative. Agreement (CEPA) in 2003. According to Manunza,
Manunza noted, “The region is already China’s most important sticking points between the regions include
international region, with Guangdong province currency use, immigration rules, and corporate tax
representing 26 percent of China’s trade and 28 rates. Therefore, as well as infrastructure projects,
percent of China’s exports.” Further to this, Manunza the region will require more harmonized policies and
said, “A business that is already established in the Pearl regulations so that goods, services, capital, and people
River Delta region will be offered the opportunity to can move more freely within the region.
expand its range and use the region as a springboard
to shift towards a more international approach.” The region will also need to attract international
Companies located in the region that have already talent if it is to be more innovative and rival other
made this shift include Chinese tech giants Huawei bay areas, such as San Francisco, which is known for
and Tencent. attracting leading talent from all around the world.
In its quest to become a world innovation center,
As an international city with a highly developed Shenzhen already offers incentives such as tax breaks
professional services industry and RMB convertibility, to attract talent and investment. Despite these
Hong Kong can assist Chinese companies to achieve programs, Manunza cautioned, “The region will need
these global ambitions, just as it has traditionally to give more tax relief to make it more attractive,
assisted international companies in achieving their as well as infrastructure investment, which will be
ambitions in mainland China. important to the development of the GBA and its
future success”.
Integration challenges
While the GBA initiative faces an array of practical
A more integrated GBA will help make businesses hurdles, it is clearly ambitious, and offers great
in the region more competitive as they will be potential and opportunities. If the ambitions of the
more integrated into both local and global supply initiative are realized, the GBA will rival other great
chains. Businesses will also be able to increase their bay areas in the world, and transform the region into a
competitiveness by relocating to new development global economic and business hub.■
hotspots, such as Zhongshan, Zhaoqing, and Huizhou,
where rents and labor costs are lower than Shenzhen Since its establishment in 1992, Dezan Shira & Associates has
and Guangzhou. been guiding foreign clients through Asia’s complex regulatory
environment and assisting them with all aspects of legal, accounting,
For the initiative to be successful and for the whole tax, internal control, HR, payroll, and audit matters. As a full-
region to be more internationally competitive, cities in service consultancy with operational offices across China, Hong
the GBA must move away from unhealthy duplication Kong, India, and ASEAN, we are your reliable partner for business
and low-value manufacturing. Manunza observed, expansion in this region and beyond.
“The idea is to strengthen the cooperation among
For inquiries, please email us at info@dezshira.com. Further
information about our firm can be found at: www.dezshira.com.
6 AmCham South China
will make it easier for middle-class consumers to escape the cities within the region by focusing more on their
to Macau and Zhuhai for the weekend. competitive advantages and unique strengths, to create
a system in which each city is able to complement one
Other projects in the pipeline will also help the another”. In turn, this will help maximize synergies
region to move up the value chain. The Guangdong between the cities.
Free Trade Zone will make the region more open to
international investment in the targeted industries. However, the region will have to overcome silos
Further to this, in January 2017 China and Hong Kong between cities, especially those between Guangdong
agreed to build the Lok Mau Chau Loop Technology province, Macau, and Hong Kong. Currently, the
Park. Located in Hong Kong right on its border with region is less integrated than the European Union
Shenzhen, the park will allow Hong Kong to tap into (EU). “A successful GBA project,” Manunza said, “will
Shenzhen’s booming innovation and startup ecosystem only arise when each single city in the region is able to
whilst also retaining Hong Kong’s strong legal system prioritize the Bay Area’s benefits over individual ones.”
and business environment.
For example, several sectors in the Chinese mainland
The initiative will have international impacts beyond are still closed to investment from Hong Kong despite
the GBA, as the region is located on the maritime the signing of the Closer Economic Partnership
section of China’s ambitious Belt & Road Initiative. Agreement (CEPA) in 2003. According to Manunza,
Manunza noted, “The region is already China’s most important sticking points between the regions include
international region, with Guangdong province currency use, immigration rules, and corporate tax
representing 26 percent of China’s trade and 28 rates. Therefore, as well as infrastructure projects,
percent of China’s exports.” Further to this, Manunza the region will require more harmonized policies and
said, “A business that is already established in the Pearl regulations so that goods, services, capital, and people
River Delta region will be offered the opportunity to can move more freely within the region.
expand its range and use the region as a springboard
to shift towards a more international approach.” The region will also need to attract international
Companies located in the region that have already talent if it is to be more innovative and rival other
made this shift include Chinese tech giants Huawei bay areas, such as San Francisco, which is known for
and Tencent. attracting leading talent from all around the world.
In its quest to become a world innovation center,
As an international city with a highly developed Shenzhen already offers incentives such as tax breaks
professional services industry and RMB convertibility, to attract talent and investment. Despite these
Hong Kong can assist Chinese companies to achieve programs, Manunza cautioned, “The region will need
these global ambitions, just as it has traditionally to give more tax relief to make it more attractive,
assisted international companies in achieving their as well as infrastructure investment, which will be
ambitions in mainland China. important to the development of the GBA and its
future success”.
Integration challenges
While the GBA initiative faces an array of practical
A more integrated GBA will help make businesses hurdles, it is clearly ambitious, and offers great
in the region more competitive as they will be potential and opportunities. If the ambitions of the
more integrated into both local and global supply initiative are realized, the GBA will rival other great
chains. Businesses will also be able to increase their bay areas in the world, and transform the region into a
competitiveness by relocating to new development global economic and business hub.■
hotspots, such as Zhongshan, Zhaoqing, and Huizhou,
where rents and labor costs are lower than Shenzhen Since its establishment in 1992, Dezan Shira & Associates has
and Guangzhou. been guiding foreign clients through Asia’s complex regulatory
environment and assisting them with all aspects of legal, accounting,
For the initiative to be successful and for the whole tax, internal control, HR, payroll, and audit matters. As a full-
region to be more internationally competitive, cities in service consultancy with operational offices across China, Hong
the GBA must move away from unhealthy duplication Kong, India, and ASEAN, we are your reliable partner for business
and low-value manufacturing. Manunza observed, expansion in this region and beyond.
“The idea is to strengthen the cooperation among
For inquiries, please email us at info@dezshira.com. Further
information about our firm can be found at: www.dezshira.com.
6 AmCham South China
