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This regional integration project arises in 2017, when the Chinese president witnessed the signing of the Framework Agreement to deepen the Cooperation between Guangdong – Hong Kong – Macao in the Development of the Bay Area* link, a document made by the representatives of the National Development and Reform Commission China. As part of this Framework Agreement, a list of cooperation priorities among which the promotion of infrastructure connectivity, market integration, development of an innovation and technology centre, establishment of a coordinated network of modern industry, improvement of the design, was highlighted. standard of living, and establishment of international cooperation platforms.
The above represents not only an opportunity for the development of projects among local companies, but also new sectors where Latin American companies can contribute knowledge and business expertise.
* English translations of the Hong Kong SAR website bayarea.gov.hk
WHY THE GREATER BAY AREA?
THE MARKET DIMENSSIONS
With a population of over 71 million people in an area of almost 57 thousand square kilometres, and China’s highest GDP per capita ($ 23,000 per year on average), the GBA is emerging as one of the most relevant regional economies globally Data from the Hong Kong Trade Development Council * indicate that during 2018 the region not only reported a GDP equivalent to 1.6 billion dollars, but also maintained an economic growth of 5.9% in real terms, despite the impact on trade derived from the commercial conflict with the United States. The region has a developed services sector, being Hong Kong, Macao and Guangzhou the cities that report a greater participation of this industry in its economy. While the economies of the cities of Shenzhen, Foshan, Donguan, Huizhou, Zhongshan, Jiangmen, Zhuhai and Zhaoqing also report an important component of high-tech manufacturing.
* 2019. HKTDC Statistics of the Guangdong-Hong Kong-Macao Greater Bay Area.
INNOVATION AND TECHNOLOGICAL DEVELOPMENT
Guangdong Province is the birthplace of major technology companies such as Huawei, ZTE, Tencent, among others. In recent years, cities in Guangdong Province, in addition to Hong Kong and Macao, have endeavoured to create an ecosystem that favours technological start-ups, as well as cooperation with universities in various countries on artificial intelligence issues, robotics, design, smart cities, biotechnology, and smart manufacturing. It is also important to highlight the fact that several incubation and acceleration programs have been opened for start-ups in the GBA region, offering benefits such as office rental at preferential rates, infrastructure necessary to develop a tech project, and also the needed entrepreneurial ecosystem allowing to raise capital and capture opportunities in sectors such as fintech, biotechnology and applications.
EXPERIMENTATION IN ECONOMIC OPENING
Both economic growth and technological innovation would be irrelevant without innovation in trade and investment facilitation policies. In this sense, one of the main objectives of the GBA initiative is the experimentation in opening the economy. In recent months, various facilitation measures have been approved for residents and businesses that will allow a greater flow of capital, business and people in the region. This will not only consolidate the GBA region as a large market of 71 million people, but will also grant access advantages to those companies that have a presence in the area.
WHAT ARE THE SECTORS THAT WILL RECEIVE GREATER IMPULSE IN THE GBA?
- International Trade
- Smart manufacturing
- Technological innovation (artificial intelligence, blockchain, biotechnology, communications, fintech)
- Tourism and recreation
- Creative industries
- Financial services
- Legal services (intellectual property, arbitration and mediation)
In Hong Kong alone, efforts are focused on consolidating its status as a financial, transportation and international trade centre; strengthening the trade of Chinese yuan, asset management and financial risk; and strengthening the development of the professional services sector, specifically legal services and innovation.
WHAT ARE THE OPPORTUNITIES FOR LATIN AMERICAN COMPANIES IN THE GBA?
Trade to and from the GBA region and mainland China.Taking advantage not only of the cultural dimensions and similarities of the market, but also the first quality infrastructure in transport and logistics.
Professional services.Legal, accounting and tax services. Architecture, engineering, quality control, manufacturing firms, among others.
Start-ups in technology and applications.Taking advantage of the entrepreneurial ecosystem and the various incubation and acceleration programs.
Tourism and recreation.Participating in the development of the industry in southern China. Recreation consulting and services. Services for hotels and restaurants. Wine and gourmet food trade.
If you are interested in learning more about business opportunities in the GBA region, please contact us by email: contact@gbalatamtradeandinvestment.
