How Technology Can Enhance Connectivity Across the GBA

release time:2021-12-27

How Technology Can Enhance Connectivity Across the Greater Bay Area

By Edward Tse

A recent article authored by Gao Feng Advisory CEO Dr. Edward Tse will be published by China Daily in December 2021.

The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) is a national level strategic imperative. It aims to deepen cooperation among the 11 cities in the region, leveraging comparative advantages of each while facilitating integration of the region’s economic development. 

The GBA is unique as it includes three jurisdictions that are separated by physical borders. The connectivity for the flow of people, goods, capital and information, is critical for the functioning of the Greater Bay Area.

Financial services are one area where increased connectivity is all too evident. A series of programs instituted over the last several years have enabled investments across borders within the area. The Stock Connect and Bond Connect schemes were launched in 2014 and 2017 respectively, facilitating the flow of investment between Hong Kong and the mainland in stock and bond markets. Following the success of these programs, Wealth Management Connect, the first cross border scheme focused solely on the Greater Bay Area has been launched in October 2021, further opening up the mainland’s financial market while promoting economic integration in the region.

As China has now entered the new era powered by new technologies such as artificial intelligence (AI), 5G, blockchain and cloud computing, the GBA is leading the way in developing applications of these new technologies. Emerging innovations will further enable connectivity beyond what has been possible hitherto. During and after the pandemic, new patterns of business models have emerged along the way. These would span areas such as the next generation of smart cities and digitalization of traditionally offline industries such as healthcare.

The GBA has also become a hotspot for fintech innovation.  Using blockchain enabled distributed ledger technology (DLT), integration of multiple services is now possible. One example is iShenZhen, a digital identity verification system in Shenzhen, which leverages DLT, big data and AI, to offer financial systems designed to function seamlessly across borders, furthering the goal of a synergized region.

China is also at the forefront of central bank digital currency (CBDC) research and application. The GBA is among the first to test China's new digital currency. In October 2020, Shenzhen launched a digital currency trial, releasing virtual red packets to the public totaling 10 million yuan (US$1.47 million). These pilots continue to strengthen the GBA’s fintech infrastructure, while also preparing the region for adopting digital currencies and reap the key benefits of transparency and convenience.

Business models across the GBA are also being transformed. In healthcare, “Internet + Healthcare” platforms such as WeDoctor are helping GBA residents obtain online and offline one-stop "remote-diagnosis, treatment, and post-treatment" services through various channels conveniently. With the accelerated interconnectivity of health information, digital healthcare operations and cooperation in the region will become increasingly prevalent.

For people and goods movement, physical infrastructure (bridges and highways) and institutional infrastructure (systems and information) continue to integrate. The opening of the Hong Kong-Zhuhai-Macao Bridge and the comprehensive upgrade of other transportation infrastructure (airports, highways and high-speed rail networks) have helped further connect cities within the GBA. Meanwhile, autonomous driving players like AutoX, We Ride and Baidu’s Apollo are making headway in transforming transportation in cities such as Guangzhou and Shenzhen, making it more intelligent and autonomous, and paving the way for smart transportation systems throughout the GBA.  Similar potential exists in the intelligent, connected and increasingly autonomous commercial vehicle sector.

In manufacturing, the GBA is navigating the road towards becoming an intelligent, connected, and distributed manufacturing hub. By 2022, increasingly, technologies in digital and automation aspects as well as data and cloud computing will re-define how manufacturing happens. As Hong Kong capitalizes on the opportunity to further its “re-industrialization” initiative, it will have the opportunity to leapfrog into a new manufacturing set-up and ecosystem where not everything needs to be physically located in Hong Kong, i.e., much can be in other GBA cities.  Connectivity through technology will accelerate Hong Kong’s ability to re-build its position in manufacturing, and that will manifest in a new form.

Cities within the GBA are also becoming smarter, with the application of new technologies laying the foundation of digital infrastructure. Guangzhou, for example, is building a "digital twin city" covering key features of situational awareness, operations monitoring and real-time management. As cities become smarter, their ability to provide support in connecting key urban functions such as epidemic prevention and control is getting enhanced.  

However, with greater connectivity come new challenges. The massive amounts of data being generated need comprehensive data security measures. The newly issued Data Security Law (DSL) and the Personal Information Protection Law (PIPL) are the first steps toward building legal support for the digital economy’s development. Cross-border data should be treated as a high priority for the GBA’s integrated development. Regulatory bodies across the borders must collaborate to form the rules and mechanisms for cross-border data management and security standards. Pilot programs for allowing cross-border data flows should be encouraged and undertaken.

Enhancing the connectivity within the GBA will be the key to it becoming a world leading region. Connectivity across multiple areas such as smart cities, manufacturing hubs, mobility and health care delivery boosts economic productivity and living standards. The GBA’s unique positioning makes it a role model to be adapted across China and potentially other parts of the world.

About the Author

Dr. Edward Tse is founder and CEO, Gao Feng Advisory Company, a founding Governor of Hong Kong Institution for International Finance, Adjunct Professor of School of Business Administration at Chinese University of Hong Kong and Professor of Managerial Practice at Cheung Kong Graduate School of Business. He started his strategy consulting career at McKinsey’s San Francisco office in 1988 before returning to Greater China in the early 1990’s. He became one of the pioneers in China’s management consulting industry, by building and running the Greater China operations of two leading international management consulting firms (BCG and Booz) for a period of 20 years. He has consulted to hundreds of companies, investors, start-ups, and public-sector organizations (both headquartered in and outside of China) on all critical aspects of business in China and China for the world. He also consulted to a number of Chinese local governments on strategies, state-owned enterprise reform and Chinese companies going overseas, as well as to the World Bank and the Asian Development Bank. He is the author of several hundred articles and five books including both award-winning The China Strategy (2010) and China’s Disruptors (2015), as well as 《竞争新边界》 (The New Frontier of Competition), which was co-authored with Yu Huang (2020).

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