In our sixth China Report we look at the plans and outlook for the Greater Bay Area (GBA). Like the rest of China, the GBA has seen a dramatic transformation in the past forty years. In the late 1970s, then known as the Pearl River Delta, it was best known as being ‘the world’s factory’ leading the world in low cost manufacturing. It is now a highly productive, agile and competitive district for advanced manufacturing and research and development. Huge investment in the overall infrastructure and an ambitious Five-Year Plan could see it become one of the most important coastal areas in the world.
When Deng Xiaoping’s reforming leadership began in 1978 China lagged its economically booming neighbours such as South Korea and Japan. Since then decades of robust growth has seen China become the second richest country on Earth. Development in the Greater Bay Area forms part of China’s growth plans for the next decades.
Britain’s history with China is long, close and occasionally fractious. However, since the turn of the century China has been an increasingly important trading partner for the United Kingdom. China is now the UK’s sixth largest trading partner accounting for around 6% of exports, rising to nearly 8% with the inclusion of Hong Kong. As the UK for the first time in more than a generation is focussing on trade outside of Europe it is hoped that this figure will rise.
Recent interactions between Beijing and London typify the importance of this relationship. In June the Chinese ambassador to the Court of St. James Liu Xiaoming spoke warmly of a new Golden Age of bilateral relations. Liu invited the possibility of Britain bringing its world leading regulatory expertise to China’s vital Belt and Road Initiative (link here). This came in the same month as the launch of the historic Shanghai-London Stock Connect. This scheme, four years in the making, will enable eligible companies on the London stock exchange to access Chinese investment, and granting international investment access to Shanghai listed entities.
The value of this relationship was brought home during the 10th UK China Economic and Financial Dialogue between Chancellor Phillip Hammond and Deputy Premier of China Hu Chunhua. An estimated £500 million worth of new deals between British and Chinese businesses was announced at the summit. These varied from the opening of a representative office of the China Industrial Bank in London, to a collaboration between arboreal tourist attractions in Cornwall and Beijing. The wide range of collaboration underlines the symbiotic and varied relationships at stake.
Importantly, last month’s G20 Summit saw a thawing in Sino-US relations and a relaxation in proposed restrictions on the operation of Huawei, which has removed potential pressure from the UK as it seeks to work with both its allies.
As this report sets out the ambitious proposals for the Greater Bay Area form a crucial new thread in China’s on-going growth. China is an increasingly vital trading partner a bullish outlook for the GBA represents good news for British businesses and investors – notwithstanding the immense challenges posed by the current situation in Hong Kong which we can only hope soon find peaceful and settled resolution.
You can read the full report here.