Topics in this section: - Greater Bay Area's GDP growth push achievable on policy thrust - Greater Bay Area well-positioned as a growth incubator - Greater Bay GDP to exceed Tokyo Bay, New York Bay areas by 2030 - Talent, resources may promote specialization - GBA may yield sustainable revenue growth, promote M&A
These analyses are by Bloomberg Intelligence senior analyst Francis Chan.
China's Greater Bay Area (GBA) -- an ambitious economic development plan -- is favorably positioned for long-term regional growth. High single-digit annual GDP gains are sustainable and achievable due to the government's push to more closely integrate growth powerhouse sectors such as financial services, technology and health care.
Greater Bay Area well-positioned as a growth incubator
Fostering economic development will require stepping up the flow of trade, capital and people into the GBA while positioning the region as a growth incubator and investment hub for high-tech businesses and manufacturers. China is likely to speed up development of the GBA, in our view, despite incipient headwinds to external demand and a renewed focus on domestic consumption. The GBA -- comprising Hong Kong, Macau and nine cities in the Pearl River Delta -- is an ambitious development and integration plan backed by the governments of Hong Kong and mainland China.
GBA's population of 70 million is 10 times Hong Kong's, with quadruple its annual GDP, at $1.64 trillion. This gives numerous industries significant opportunity to tap into a growing market for both consumers and businesses.
Greater Bay GDP to exceed Tokyo Bay, New York Bay areas by 2030
China's Greater Bay Area GDP growth could soar to 9% a year by 2030, according to HSBC and KPMG, far surpassing other bay areas such as Tokyo, New York and San Francisco. The latter three posted GDP growth of 1.3-4.7% in 2017, according to the Hong Kong Trade Development Council. Guangdong province's industrial hub upgrade -- including rapid high-tech development and closer ties with Hong Kong -- positions the Greater Bay Area's GDP to exceed greater Tokyo's $1.8 trillion and greater New York's $1.7 trillion. Its population of 70 million, relatively low per capita income base and potential for regional integration will serve as leading growth drivers.
Hong Kong, Guangzhou and Shenzhen account for two thirds of the GBA's economy. Their combined annual GDP could reach $4.6 trillion by 2030 from $1.5 trillion in 2017.
Talent, resources may promote specialization
This analysis is by Bloomberg Intelligence senior analyst Francis Chan and contributing analyst Denise Wong.
Improved infrastructure in China's GBA should make talent, resources, and capital allocation more efficient, and foster regional specialization. Financial professionals from Hong Kong could more effectively serve mainland China-based companies, while technology experts from Shenzhen could help advance manufacturing in Dongguan, Foshan, Huizhou, and elsewhere. The region could also boost trade and logistics, drawing on Hong Kong and Guangzhou's standing as gateways abroad. Macau and Zhuhai could focus on enhancing their allure as international tourist venues.
Improved access to jobs, education, capital, goods and services could also shrink wealth disparities and spur development in smaller localities.
GBA may yield sustainable revenue growth, promote M&A
Several industries stand to reap substantial benefits from China's Greater Bay Area over the coming decade as an influx of capital and talent fuel sustainable economic growth. Pharma and biotech -- prominent sectors in China's new economy -- will get an innovation boost, and a rapidly improving infrastructure is likely to spur tourism. Financial integration, a key GBA pillar, will drive revenue growth at property managers, banks and asset managers while overseas M&A could pick up at regional insurers. Power consumption could double on industrial upgrades while freight and passenger traffic surge on higher regional trade flows.
GBA may also emerge as an innovation hotbed for technology and R&D, including for artificial intelligence.
