The Chinese government has a plan to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an economic and business powerhouse. It will be called The Greater Bay Area.
Some in China’s central bank are looking to the European Union and Britain to decide how best to do this.
The Greater Bay Area already has a total economy almost equal to Australia’s. But the area is divided because Hong Kong and Macau have their own money and legal systems. This makes integration difficult.
China's central bank’s branch in Shenzhen created a 295-page report on financial and economic integration in the bay. It suggested building a single market similar to the 28-state European Union. The report was written with China Merchants Bank’s chief economist and published last month.
The report notes some of the benefits of European integration. But it also points to some of the problems China faces as it tries to control an area that already has international financial markets, industrial centers and technology sectors.
In the report, the head of the Shenzhen central bank, Xing Yujing, was clear about the importance of the free movement of people and money in the bay.
The report also pointed to what could be learned from Britain’s planned exit from Europe.
The European Union and the common market have strengthened “the welfare of the European people,” the Shenzhen branch of the People’s Bank of China said in a statement.
It added that suggestions do not represent official policy positions.
Britain has made professional decisions to reduce the effects of Brexit while keeping “integration with European economy and finance,” the report also said.
The European common market permitted the free movement of labor. So should the Greater Bay Area, said Gary Smith. He is a London-based director at Barings Investment Institute.
“That’s the way that the economic benefit is maximized,” he said.
Europe has removed border controls between 26 of its 28 countries. In the Greater Bay Area, there are still borders between Hong Kong, Macau and mainland China. This is the result of the “One Country, Two Systems” agreement that permits the two cities to keep their way of life while under Chinese rule.
For a possible solution, Xing noted Britain’s idea of a ‘soft’ border with Ireland after Brexit. The soft border would permit the free movement of people, money and products between the Republic of Ireland and Northern Ireland.
The report said an electronic border could be put in place in the bay and businesses could pay taxes online after crossing it.
I’m Susan Shand.
Words in This Story
integration – n. to combine (two or more things) to form or create something
benefit – n. a good or helpful result or effect
sector – n. a part of an economy that includes certain kinds of jobs
maximize – adj. to use (something) in a way that will get the best result
regulatory – adj. making or concerned with making official rules about what is acceptable in a particular business, activity