Mon, Mar 18, 2019 - Page 6 News List

EDITORIAL: Bracing for another Chinese initiative

China’s plan for the Greater Guangzhou-Hong Kong-Macau Bay Area, which it unveiled last month, indicates that Beijing policymakers intend to integrate Hong Kong and Macau with Guangzhou, Shenzhen and seven other Chinese cities in the Pearl River Delta to form a high-tech financial megalopolis by 2035. The planned Greater Bay Area aims to rival other megalopolises such as the San Francisco Bay Area, the New York Metropolitan Area and the Tokyo Bay Area, but the ultimate goal is to support Beijing’s Belt and Road Initiative.

The announcement has precipitated much discussion and engendered various analyses of the pros and cons, as the area — covering 55,905.5km2 — would bring together various borders, legal systems, currencies and tax rates.

While there is excitement over the prospect that the financial and high-tech industries will develop further in the fields of asset and wealth management, the offshore yuan business, smart city innovation and technological development, there is also concern that including Hong Kong and Macau in the Greater Bay Area might further weaken their autonomy and global competitiveness, due to the “one country, two systems” model.

Some point out reasons to be skeptical about the plan, after previous special economic zones or free-trade programs disappointed, or turned into wasteful infrastructure projects and higher property prices.

Regardless, the plan has raised eyebrows in Singapore, as the ambitious Greater Bay Area project would intensify the city-state’s competition with Hong Kong and further threaten its status as an international hub for finance and technology, the Nikkei Asian Review reported earlier this month.

There is also concern in Taiwan about how the plan might threaten the long-term development of the nation’s high-tech industry and prospects for increasing global exports.

China’s plan faces many challenges, such as developing concrete visa and banking solutions to smoothly transfer people and capital across borders, as well as addressing the labor shortages, rising production costs and higher housing prices that could hinder its progress.

However, the Chinese Ministry of Finance’s tax bureau on Saturday announced subsidies designed to attract talent to the Greater Bay Area, which would further exacerbate the brain drain in Taiwan.

Government officials in Shenzhen and Guangdong Province are drafting specific regulations to cover identifying talent and disbursing subsidies, which would be granted to Hong Kongers, Macanese, Taiwanese and other nationalities who settle in the nine Chinese cities within the Greater Bay Area before the end of 2023, Reuters reported, citing a document released by the tax bureau.

Taiwan’s declining birth rate and aging society — as well as the gap in market demand between higher education and industry — have produced a workforce shortage over the past few years, while the outflow of capital, technology and talent to China has already taken a toll on national development.

With wages rising too slowly in Taiwan, Beijing’s subsidies for joining the Greater Bay Area, its “31 incentives” and other measures are likely to attract more Taiwanese businesspeople and creative professionals to China, further worsening the economic situation in Taiwan. The government should have precautionary measures in place to not be caught off-guard by the effects of the Greater Bay Area project.

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