There is a view that not much has really happened on the ground since the Greater Bay Area (GBA) initiative was launched a few years ago and the Outline Development Plan for that was released in February this year. While some may complain that there is just talk with no real action, others are more positive.
Hong Kong people are sometimes quite impatient, says Margaret Fung, managing director of TMF Hong Kong, a unit of the TMF Group, which provides business services to firms operating on an international scale.
“This is a grand scheme, and time is needed,” she told EJ Insight.
Typically, authorities will leak out what they are planning to test the market response, after which professional communities will express their opinions.
The time taken from such informal consultation to final announcement of concrete polices could be a year or longer, Fung said, speaking from her experience, after years of working in China in other capacities.
The scheme is nothing but broad strokes, or a big framework. It’s up to individual cities to hammer out bilateral deals and fill in the details, Fung added.
GBA covers four core cities, namely Hong Kong, Macau, Guangzhou and Shenzhen, and seven others — Dongguan, Foshan, Huizhou, Jiangmen, Zhaoqing, Zhongshan and Zhuhai, in alphabetical order.
Previously, investors tended to give more attention to northern China. Most foreigners, as a matter of fact, are not quite familiar with some of the GBA member cities.
But now the GBA scheme has put southern China in the spotlight and raised its profile quite substantially, said Kenneth Lee, head of corporate secretarial services at TMF Hong Kong.
The businesses communities outside China are now more aware of the GBA and southern China, he says.
Lee noticed a pick-up in investment interest in southern China from overseas parties, though it would be difficult to conclude if the GBA plan has been the direct trigger, he says.
When it comes to foreign direct investment, companies normally perform detailed research over an extended period. Recommendations from their business partners in China, production and logistics requirements, target market, etc. are all important factors in their decision.
Corporate secretarial, human resources and payroll, plus accounting and tax are the three major business areas covered by the Holland-based business administration services provider.
Helping companies to register, acquire license and set up an office is a key service under corporate secretarial division.
Setting up a company in Hong Kong is relatively straightforward, but it could be a lot more complicated if one wants to do it in China.
To keep abreast of the latest changes related to GBA, TMF’s Hong Kong office talks extensively to its Shenzhen unit to get frequent updates.
In addition to incentives like lower withholding tax and more favorable individual income tax terms, Hong Kong firms, in particular those in the technology sector, can make use of the GBA scheme to tap the abundant research and development talent in the region, Fung pointed out.
Of course, some investors are drawn to the much larger consumer market, said Lee, citing the example of a food and beverage chain in Hong Kong that is looking to expand across GBA.
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