Author: Man Nga Ching, Vice Director, Department of Hong Kong, Macao and Regional Development
Editor’s note: February 18, 2021 marks the two-year anniversary of the announcement of the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area. The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) cities have been exploring inter-city comprehensive regulatory and systematic integration within the framework of the existing legal system. While fruitful progress has been made, at the same time there is room for optimization.
Top-level design: build an innovative policy system under the “one country two systems” principle
Key projects such as Qianhai (of Shenzhen city), Nansha (of Guangzhou city), and Hengqing (of Zhuhai city) have made significant progress towards GBA cooperation. However, some aspects require improvement, namely the extent of inter-city cooperation, policy making and GBA’s systematic integration. A comprehensive policy system that addresses and legally facilitates regulatory and systematic integration, the exchange of resources, and the integration of livelihoods should be built to deepen GBA cooperation under the “one country two systems” principle. The varying features and development strengths of the different GBA projects should also be considered. For instance, in the Luohu Pilot Area, Shenzhen, integration of livelihoods can be enhanced via the exploration and implementation of citizen treatment policy for Hong Kong and Macao residents.
Making Breakthroughs: Promoting the establishment of a well-connected civil and commercial judicial system in the Greater Bay Area
Over the past 40 years of reform and opening-up, and especially since the return of Hong Kong and Macao, the judicial assistance system in civil and commercial matters across Hong Kong, Macao and the Chinese mainland has been gradually improved, however, witha number of outstanding issues, such as time-consuming and difficulty with coordination and implementation.
The effective economic operation of the GBA depends on the creation of an efficient and comprehensive civil and commercial dispute resolution mechanism across the region. With the GBA’s growing market interconnectedness, the number of cross-regional legal disputes will also inevitably grow. Promoting the establishment of a well-connected civil and commercial judicial assistance system across the area is thus critical for the development of the GBA. This will also be a cost-effective approach towards regulatory and systematic integration without unifying superordinate laws or national rules. By deepening mutual legal assistance and law enforcement cooperation, the judgments in civil and commercial matters between the different legal systems in Guangdong, Hong Kong and Macao can be better coordinated, communicated and circulated. This will provide a good judicial environment for the efficient economic operation of the GBA.
Under the principle of “one country, two systems”, the GBA should strengthen the mechanism and arrangement of civil and commercial judicial assistance, facilitate the mutual recognition and enforcement of arbitration awards, and establish a convenient enforcement procedure for arbitration awards as well as civil and commercial judgments. These works should be conducted on the basis of seeking common ground while shelving differences within GBA cities, tackling easier issues first and focusing on key issues, so as to promote the establishment of a closer and more integrated civil and commercial judicial assistance system.
Starting point: Give full play to the comprehensive pilot reform authorization in Shenzhen
This reform is characterised by its openness, flexibility and adaptability. The first issue of forty authorized matters and the Implementation Plan (2020-2025) for Comprehensive Pilot Reform in Shenzhen to Build the City into a Pilot Demonstration Zone for Socialism with Chinese Characteristics have been issued. The authorized list delegated greater legislative power to the Shenzhen special economic zone and granted Shenzhen the right to take precedence in the fields of artificial intelligence, self-driving cars, unmanned aircraft, big data, biomedicine, medical health, information services, personal bankruptcy act. Some of these areas are industries closely related to those that Hong Kong has an advantage in (e.g., unmanned aircraft).
Furthermore, the authorized list leaves us with the question of whether the legislative power of Shenzhen special economic zone could be used to better connect Shenzhen and Hong Kong with the development of specific industries while breaking through the regulatory barriers in the construction of the Shenzhen-Hong Kong cooperation parks. It is suggested that the comprehensive authorized pilot reform in Shenzhen could become a critical starting point to promote the comprehensive connection between Shenzhen and Hong Kong regulations. Shenzhen’s experience can be taken as an example to be replicated and promoted. In the future, the existing policy practices and convergence regulations shall be summarized and upgraded into legislation, increasing the effectiveness while balancing the flexibility of the comprehensive authorization with the stability of local legislation.
On November 24, Mr.Peleg Lewi, Consul General of Israel to South China, visited CDI and exchanged ideas on the economic development of Guangdong-Hong Kong-Macau Greater Bay Area, as well as Sino-Israeli economic and academic cooperation with CDI researchers. Dr. Guo Wanda, executive vice president of CDI, shared insights on GBA’s overall framework, economic structure and its unique competitive strengths, which is the steadily growing inflow of young talents and the integration of a rich and long industry chain.
Author: ZhangYuge, Director, Hong Kong and Macao Research Department, CDI
Macao should take advantage of the plan to develop the Guangdong-Hong Kong-Macao Greater Bay Area to diversify its economy.
Macao has realized prosperous and stable socioeconomic development since its return to the motherland. However, moderate economic diversification is the key to better implementing the "one country, two systems" principle in the future.
Since the Macao Special Administrative Region government released policies to promote economic diversification in 2004, its economic landscape has not changed much. Macao still has a long way to go in economic diversification. Statistics published by the SAR show that the added value of gambling (including intermediary industries) accounted for 50.5 percent of Macao's GDP in 2018, 4.3 percentage points higher than 2004; in terms of tax revenue, gambling generates 113.5 billion patacas ($14.1 billion) in recurrent income and capital income, making up 80.3 percent of the SAR's total.
Moderate economic diversification is the future for Macao. But how? It will not be achieved solely on Macao's own strengths. Macao needs to ride the momentum of the plan to develop the Guangdong-Hong Kong-Macao Greater Bay Area. On the one hand, it should seek to attract resources from the Greater Bay Area to develop industries independent of gambling; on the other hand, it should develop a headquarter economy to get into the Greater Bay Area market and develop competitive industries.
In the first place, it should develop its financial industry. The traditional manufacturing industry and the service industry are not able to compete with the gambling industry with regard to profitability. The best choice for an alternative is therefore the financial industry. Monte Carlo serves as a good example for this. Macao should take into consideration its own strengths and weaknesses in positioning itself among neighboring cities such as Hong Kong, Shenzhen and Guangzhou. Macao should prioritize developing the bond, commodities and financial derivatives markets to cater to the needs of the Belt and Road Initiative and business cooperation between China and Portuguese-speaking countries. It can develop its wealth management, internet finance and green finance by following the fintech trend in finance and innovative financing. Macao is on the same starting line with other cities in the Greater Bay Area in innovative financing, but it can take advantage of its role as a free port. It should focus on selected areas and develop finance programs with rich resources and mature conditions. It should promote the pooling of financial resources, strengthen its cooperation with Portuguese-speaking countries and enhance cooperation with Hong Kong and Shenzhen as well as with technology and financing companies.
It should also develop its competitive industries such as high-end tourism by promoting education and training. And it should seek to become the tourism education and training center for the Greater Bay Area and cultivate high-end tourism professionals; develop a high-end tourism and leisure industry to cater to the needs of the residents in the Greater Bay Area; strengthen its tourism cooperation with other cities in the Greater Bay Area and develop package tourism itineraries to attract more tourists and customers.
Second, it should accelerate the development of the exhibition industry. The goal should be to establish Macao as Asia's hub for the exhibition industry and build a modern service industry with events and exhibitions at the core. Macao's exhibition industry, with conferences as the priority, should build a multi-level and complementary exhibition market for the Greater Bay Area, boosting the competitiveness of the area as a whole.
Third, it should develop its cultural and creative industry. It should seek to strengthen its position within the coordinated development of the cultural and creative industry in the Greater Bay Area, by building a cultural and creative industry chain.
Fourth, it should bolster the competitiveness of the traditional Chinese medicine industry by developing key technologies. It should develop frontier technologies of traditional Chinese medicine with the support from State Key Laboratories of Quality Research in Chinese Medicine and Shenzhen-Macao Innovation Research Institute of Traditional Chinese Medicine; expand the market of traditional Chinese medicine of Macao using the platform of Traditional Chinese Medicine Science and Technology Industrial Park of Cooperation Between Guangdong and Macao and promote the traditional Chinese medicine industry of Macao internationally, using the World Health Organization Collaborating Centre for Traditional Medicine as the platform for international exchanges.
To realize its moderate economic diversification, Macao should revise its laws and regulations to facilitate the development of new economic forms; adjust its policies for attracting and cultivating talents, which are essential for supporting its economic diversification; attract resources from the Chinese mainland to Macao, give full play to Macao's role as a free port; and enhance the relationship between Macao and Hengqin New Area in the neighboring mainland city of Zhuhai.