21 October 2016
Residential and commercial buildings stand near a bridge under construction in the Gongbei district of Zhuhai. Photo: Bloomberg
Residential and commercial buildings stand near a bridge under construction in the Gongbei district of Zhuhai. Photo: Bloomberg

Zhuhai needs money from Hong Kong badly

If you stand on the tree-lined waterfront Lovers Walk in central Zhuhai, you can see three giant construction projects. One is the bridge to Hong Kong, another an opera house in the shape of two sea shells and the third a large museum overlooking the sea.

The three have one thing in common – bringing Hong Kong’s people and their money to the city to ensure a bright economic future.

In the first quarter of this year, Zhuhai reported a GDP of 40.527 billion yuan (US$6.5 billion), up 8.5 percent over the same period in 2014 and the highest growth of any city in Guangdong.

But, despite being a special economic zone (SEZ) and neighbor of Macau, its GDP ranked only 10th in the southern province last year.

In the first quarter this year, sales of commercial property rose 4.6 percent to 623,200 square meters – after falling for eight consecutive months from April 2014.

“The population is too small and volume of business too low,” said Liang Minggui, who moved to the city from the eastern province of Hubei in 2005 and earns a modest living as a sales representative.

“In Shenzhen, Foshan and Zhongshan, you can get rich but not here – unless you are in high-tech. That sector is reserved for the few.”

Liang’s view reflects those of many people in the city who think its government has been too conservative in its planning。

Since it became an SEZ in 1980, Zhuhai has pursued a strategy of creating a city of high-tech, tourism, leisure, education and retirement and made one of the most pleasant environments in China.

It has banned polluting factories; its major industries are electronic information, bio-pharmaceuticals, petrochemicals, electric appliances, precision machinery and energy.

Hong Kong people play a key role. According to official figures, the city received 4.6 million visitors in 2014, an increase of 15.5 percent over the previous year.

Of these, Hong Kong, Macau and Taiwan people accounted for 3.92 million, up 21 percent; Hongkongers were the largest of the three.

Average hotel occupancy in 2014 was 61.2 percent, up 4.7 percentage points over 2013. Revenue from non-mainland tourists was US$932 million, up 11.2 percent.

Hong Kong people are also critical to the health of the city’s property sector, one of the main drivers of growth. In 2014, investment in commercial housing was 26.83 billion yuan, an increase of 28 percent.

The highest growth, 15.5 billion yuan, up 71.5 per cent, was in homes of 90-144 square meters. Investment in homes of over 144 square meters, 5.33 billion yuan, fell by 27.9 percent.

The result of this rapid growth in investment and eight consecutive months of falling sales is thousands of empty apartments.

Zhuhai has 690 kilometers of coastline, one of the longest in China. Many kilometers are filled with 20- to 30-storey blocks, with dozens of empty units.

Ask real estate agents, and they will tell you that the units have been sold to people from Hong Kong, Macau, overseas or other cities in China.

“They buy for investment, betting that Zhuhai prices will rise, or to use in the northern winter or as holiday homes,” one estate agent said.

Ask ordinary people like Liang: “Look at these three blocks overlooking the Pearl River — empty for 10 years,” he said. “But the developer does not want to demolish them because he wants some return on his investment.”

The great hope is the new bridge. Developers and the city government are hoping for a mass migration of Hong Kong people.

“They can live here and commute to Hong Kong every day,” said Wang Xi-jun, a property agent. “It would be about one hour each way. That is long in Hong Kong terms but average for a big city around the world. Look at the price differential – apartments in the Xiangzhou district in the city center goes for 17,000 to 24,000 yuan a square meter.

“Then how about those people who don’t need to go to the office every day, the retired and semi-retired? The living environment here is one of the most pleasant in China. And you have rapid access to Macau, Guangzhou, its airport and cities on the western side of the Pearl River,” he said.

The city is also looking to Hong Kong people to fill the seats at the new opera house, which is costing 1.72 billion yuan and consists of two shells 60 and 90 meters high.

It will have two auditoriums, for 1,550 and 500 people. This spectacular building is nearing completion on an island facing the main promenade.

But tickets for classical music, western and Chinese opera and other upmarket performances will be out of the budget of a majority of Zhuhai’s 1.5 million people.

The new museum and center of urban planning is also hoping to attract many visitors from across the Pearl River.

Buy our homes, come to our opera house and museums. Will Hong Kong people listen to this appeal?

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Hong Kong-based journalist and author. He had worked as a correspondent for the South China Morning Post in Beijing and Shanghai.

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