The Greater Bay Area ("GBA") is China's ambitious plan to integrate Hong Kong and Macau with nine urban areas in the neighbouring province of Guangdong. The aim of the project is to turn this already economically vibrant region into a global powerhouse of innovation and economic development.
In this short article, we look at the Outline Development Plan issued on 18 February 2019 from a Marine and Trade perspective.
The Outline Development Plan confirms that shipping and logistics are key industries in the GBA project. Relevant development goals include:
- Consolidating and enhancing Hong Kong's role as an international maritime centre. In particular, supporting Hong Kong as a provider of maritime services such as ship management, ship leasing, ship finance, marine insurance and dispute resolution, including arbitration.
- Increasing the shipping and logistics capacity of Guangzhou and Shenzhen ports and developing relevant infrastructure.
- Developing innovative information technology for the shipping and logistics industries, as well as passenger transport, by for example, applying cloud computing and big data to cargo handling.
- Facilitating the construction of liquefied natural gas terminals and upgrading storage and regasification capacities in Guangdong province. Also, developing coal facilities in Guangzhou and Zhuhai.
- Strengthening the protection of the marine environment and supporting clean shipping.
- Promoting the movement of both goods and people within the GBA and developing relevant infrastructure.
- Developing international cruise terminals in Hong Kong, Guangzhou and Shenzhen and promoting cruise and yacht tourism in the GBA. Also, streamlining immigration clearance procedures for ships, yachts and passengers.
- Positioning the GBA as a key location on the Belt and Road initiative. In effect, making the GBA one end of the "Maritime Silk Road".
- Developing Shenzhen as international maritime service centre and establishing a spot commodities trading platform there.
China is clearly committed to supporting shipping and logistics in Hong Kong and the wider GBA. This should be welcome news to the Hong Kong maritime industry facing competition from cities such as Singapore.
That said, the Outline Development Plan is a general guideline document only. Specific policies and initiatives will, of course, be needed to give effect to the plan. In Hong Kong, the government has already outlined some of its proposals.
- In his 2019 budget speech given on 27 February 2019, the Financial Secretary, Mr Paul Chan, stated that the government has commissioned the Hong Kong Maritime and Port Board to set up a study to examine measures to attract ship finance companies to Hong Kong and to develop Hong Kong as a ship leasing centre in the region. That study is expected to be published in the second half of 2019. Mr Chan also confirmed that the government will propose legislative amendments to grant 50% tax concessions for marine insurance.
- At a May 2019 shipping event, the Secretary for Transport and Housing, Mr Frank Chan, has advised that there are plans for the Hong Kong Shipping Registry to set up service desks in other cities. Initially, desks will be set up in London, Shanghai and Singapore but there are plans to extend the network to Australia, North Asia and North America. This network will allow shipowners better access to the registry and their services, no matter their location.
We hope to see further proposals and initiatives in the coming months and will monitor the situation closely. One particularly interesting area is the use of information technology in shipping and logistics. Shenzhen is one of China's leading cities for information technology and is home to some of China's biggest technology companies. The Hong Kong government has also committed itself to developing Hong Kong as a technology hub. Further proposals were outlined in Mr Paul Chan's 2019 budget speech, including investing in science and technology infrastructure and nurturing technology start-ups. There is therefore the potential for the GBA to become a global technology centre. It will be interesting to see whether maritime industries can draw on this resources and what synergies can be created.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.