Date
23 October 2017
The Greater Bay Area initiative can provide people and businesses in the Pearl River Delta region significant long-term benefits, according to CPA Australia. Photo: CNSA
The Greater Bay Area initiative can provide people and businesses in the Pearl River Delta region significant long-term benefits, according to CPA Australia. Photo: CNSA

Greater Bay Area plan: How to ensure its success

With China’s unprecedented economic growth and urbanization that began nearly 40 years ago, the major cities of the Pearl River Delta, including Hong Kong, now intersect to such an extent that they are collectively viewed as a mega-city.

The enhanced cooperation and coordination proposed under the Greater Bay Area plan is, therefore, the logical next big step in the Pearl River delta’s fast-paced evolution towards being a major global driver of economic growth, innovation and finance.

CPA Australia believes that the Greater Bay Area proposal should provide the people and businesses of the Greater Bay Area, including Hong Kong, significant long-term benefits.

It is important to give some context on the Greater Bay Area. It currently has a population of 67.6 million, which is significantly larger than Tokyo-Yokohama. The size of the Greater Bay Area’s economy in 2016 was just over US$1.3 trillion, making it already larger than Russia, Australia and Spain, and just behind Korea.

We foresee that given the right policy settings and coordination, the Greater Bay Area will grow to take on a significantly more important role in the global economy and in China’s Belt and Road Initiative over the coming years.

As one of the largest professional accounting bodies in the world, CPA Australia strongly supports policies that lead to greater sustainable economic growth, create new employment opportunities and improve living standards anywhere in the world.

It is in this context that we support the Greater Bay Area proposal and are encouraged by the work that the governments involved are already undertaking to ensure that this bold vision becomes a reality.

The Greater Bay Area plan is expected to promote even deeper cooperation and coordination between the cities in the Greater Bay Area so they are better positioned to compete internationally. It should allow the 11 cities that make up the Greater Bay Area, and their businesses, and people to better exploit their complementary advantages in areas such as innovation, advanced manufacturing, financing and logistics.

Zhou Linsheng, vice president of the China Society of Economic Reform stated the plan “essentially focuses on coordinating development and seeking win-win cooperation” and seeks to prevent the 11 cities falling “into vicious competition for resources, projects and talent”.

Thomas Yeung, a policy researcher, sounded a note of caution, saying that “efforts could be compromised if the regional governments and their people in the bay area only pursue initiatives that yield optimal results for their own city instead of optimal benefits for every city involved.”

Professor Zhang Guangnan of Sun Yat-sen University also highlighted the challenges when he stated: “This is a unique development model unseen anywhere around the world, as the region involves [the] one country, two systems [principle], three different currencies, three independent members of the World Trade Organization in different customs territories.”

Nurturing institutions that can push implementation of the Greater Bay Area plan and coordinate the efforts of the cities involved will do much to support its success over the long-run and help address these challenges.

The establishment of an annual consultation meeting between the governments of Guangdong province, Hong Kong and Macau, and the National Development Reform Commission (NDRC) as set out in the ‘Framework Agreement on Deepening Guangdong-Hong Kong-Macao Cooperation in the Development of the Bay Area’ should do much to improve coordination between governments.

Further, the establishment of the Academy of Guangdong-Hong Kong-Macao Greater Bay Area should help identify opportunities for reform and provide research to support policy development.
As set out in the Framework Agreement, the parties to that agreement will put forward ‘annual work plans’ and shall work together to put in place mechanisms to implement the development plan of the Greater Bay Area.

We suggest that such a ‘working mechanism for taking forward the development of the Bay Area’ could involve a formal group made up of the leaders of the 11 cities of the Greater Bay Area plus senior representatives of the NDRC and the Guangdong provincial government.

Such a group could meet on an ongoing basis and be responsible for implementing the annual work plans and overseeing research into longer-term projects. With the work plans likely to cover a broad range of topics, such a group could establish sub-committees to consider specific topics from the annual work plans, such as financial services, in more detail.

While not a directly relevant comparison, in Australia cooperation and coordination between the different levels of government is somewhat achieved through the Council of Australian Governments (COAG). Its role is to manage matters of national significance or matters that need coordinated action by all Australian governments. Its membership includes the Australian prime minister and state and territory first ministers. Under COAG is a range of sub-committees that look at specific issues in more detail.

While the COAG process in Australia may not be perfect, it does provide a model for cooperation and collective decision making between governments.

There is much to be excited about over the Greater Bay Area plan. Strong leadership and institutional support will be critical to its success and on both counts we are already seeing action on these fronts.

– Contact us at [email protected]

BN/RC

FCPA (Aust.) Divisional President 2017 – Greater China CPA Australia

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