The Hong Kong Trade Development Council’s Peter Wong explains how the planned Greater Bay Area is set to impact logistics in the region.
Interviewed by Henrik Batallones
How do plans for the Greater Bay Area factor into China’s economic strategy?
The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) comprises two Special Administrative Regions of Hong Kong and Macao, and the nine municipalities of Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing in Guangdong province.
The Greater Bay Area encompasses an area of about 56,000 square kilometers, has a combined population at 2020 year end of more than 86 million, a combined GDP of USD 1.67 trillion and a per capita GDP of USD 19,400.
GBA acts as a springboard to propel business opportunities and conveniences into mainland. Many plans are in motion. To highlight a few, the rerouting of the majority of the logistics transportation on land, sea and railway has the most obvious impact. It mutually supports the domestic and international circulation into China’s economy, opening a doorway for foreign companies to set up their offices and deal directly with China. The confidence in logistics services, experienced quality control, monitoring and high inspection standard ensures a smooth sail for investors and companies into China.
What role does Hong Kong play in the development and success of the Greater Bay Area?
Hong Kong, a gateway to mainland China and the world, is to consolidate and enhance its status as international financial, transportation and trade centers as well as an international aviation hub. The aim is to strengthen its position as a global offshore renminbi business hub, as well as an international asset management center and a risk management center.
Looking at the bigger picture, Hong Kong stands tall in the development and success of the GBA. On production scale, Hong Kong is heavily invested in developing AI-driven inventory management system to find reliable commerce. The system enables a faster processing network that handles high-value logistics at a more secure and flexible manner. Secondly, Hong Kong as a free port pursues a free trade policy and does not maintain barriers on trade. No tariff charged on import or export of goods is an icing on the cake to all investors and companies which first step foot to the GBA. Thirdly, its strategic location: Hong Kong positioned itself as a last lap to the consumers at the mainland. It is cost saving, time-efficient and yet able to preserve the quality of goods even before reaching the hand of consumers.
Hong Kong is also looking at coaching and expanding its resources in GBA. With over 26,000 logistics companies and 180,000 employees to date, Hong Kong is playing a long game with its ever-growing and assuring vast network in GBA.
What does the Greater Bay Area mean for businesses across ASEAN?
GBA offers tons of business opportunities for ASEAN businesses to sell to the region’s fast-growing middle class.
It is a powerhouse when it comes to finance, manufacturing and innovation. According to a research report by HKTDC and United Overseas Bank Hong Kong published in November last year, about six in ten businesses in the Greater Bay Area are planning to boost investments and further their operations in the ASEAN countries over the course of three years.
Given that ASEAN is both an attractive market and a competitive location for production facilities, GBA-based enterprises can capitalize on its favorable business environment to expand markets and provide goods and services meeting local demands.
Hong Kong, with its close connections with foreign markets and its world class financial and professional services, can serve as the bridge linking the GBA and ASEAN in their trading and investment activities.
What opportunities does the Greater Bay Area present for Philippine businesses, particularly those in the logistics sector?
The fast-growing middle class in the Greater Bay Area implies that there will be increasing consumer demands for high-end products, which is conducive to the development of the retail industry in the region. It is an important market that Philippine businesses should look into by strengthening their business network in the region. Together with the rise of e-commerce, it requires all players to establish better logistics synergies to bring products to market across the world faster and cheaper.
The GBA maintains its transparency around import, export and licensing procedures which highly affects the logistics sector in all regions. The GBA provides a one-stop solution, not only connects to cutting edge logistics technology, but also their facilities in handling the logistics. Fundamentally, it is the resilience and system ability that make a difference.
The GBA poses a great opportunity to businesses in the Philippines, especially SMEs, allowing them to streamline their supply chain and tap into the Chinese market to create a favorable environment and smoother movement of trade, logistics and talent exchange between the Philippine and China.
How can supply chain players in the Philippines and across the region best prepare for these opportunities?
Philippines supply chain players could consider to open offices in Hong Kong and other major cities in the Greater Bay Area to enhance their presence and visibility among merchants in the region.
Interconnectivity is the key to success and Hong Kong companies are here to help. Hong Kong is a center to steer logistics, air freight consolidation, for carrying out business connections, planning, documentation and defining new protocols and standards, such as adoption of blockchain digital ledger technology, to increase vital visibility to the logistics business Digitalization of logistics processes particularly benefit the speed and efficiency required of e-commerce transactions.
Philippine businesses could participate in our HKTDC events to network with Hong Kong service providers and to learn more about the market during our upcoming Asian Logistics, Aviation and Maritime Conference (ALMAC) to be held on November 22-23, 2022.
Finally, Philippines supply chain companies can reach out to our HKTDC Manila Consultant’s Office for more information and participation on ALMAC. Email to manila.consultant@hktdc.org.