The GBA consists of the nine Mainland cities of Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing as well as the special administrative regions of Hong Kong and Macau.

The Chinese government has ambitious plans to link these cities physically and economically, to create an urban agglomeration akin to the Tokyo Bay Area or San Francisco Bay Area. New transport links such as the high speed rail service, which can reach Guangzhou in 50 minutes and the Hong Kong-Zhuhai-Macau Bridge suddenly place Hong Kong in the midst of the GBA.

The main concerns raised about the plans are threefold. Firstly there is a concern that Hong Kong will lose its character and that ‘one country, two systems’ will be eroded by this integration. However that should not be the case; Hong Kong’s unique character as an international finance centre is a benefit to the GBA, something to be enhanced, not squashed.

Secondly, some worry that real estate values in Hong Kong will fall as businesses relocate to cheaper GBA cities. People will still want to live in Hong Kong and to site their businesses in Hong Kong because of its status as an international financial centre; however lower value businesses – such as back office operations and manufacturing – could be relocated to Guangzhou for example, where office rents are a quarter of those in Hong Kong.

Finally, there is a lack of trust that the grand plans outlined will actually come to fruition. This is not a foolish concern; there are vast differences in tax system, currency and residency between the two SARs and the nine cities, which will need to be overcome. I suspect Macau and Hong Kong will remain somewhat semi-detached from the Mainland, but still more integrated than today.

For Hong Kongers, the integration of the GBA opens up broader options, the potential to buy a decent-sized home, to have job opportunities in another 10 cities and the chance to retire somewhere with a lower cost of living, but still close to the family.

Hong Kong real estate investors too have a chance to paint on a larger canvas and a number of the city’s developers are already making progress in this regard. The GBA represents an enormous long term opportunity and now is the time to seize it.

Further reading:
Savills Hong Kong
The Greater Bay Area

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Simon Smith