Beijing approves plan for Greater Bay Area to rival San Francisco's Silicon Valley in the United States

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Beijing has given the greenlight to a blueprint for a technology-driven economic powerhouse in southern China to rival San Francisco's Silicon Valley amid doubts about the plan's feasibility.

Key points: The Greater Bay Area has a population of 69 million and a GDP of $US1.5 trillion

Experts believe the plan is part of China's strategy to catch up to America

Details of the Greater Bay Area plan is set to be announced in February

The Greater Bay Area plan aims to link Hong Kong, Macau, and nine cities in the Guangdong Province — including the megacities of Shenzhen and Guangzhou — into a giant science and IT hub comparable to the combined size of San Francisco and Tokyo's bay areas by 2035.

China hopes to achieve this by integrating the cities' infrastructure and expertise in finance, manufacturing and technology by removing trade barriers, encouraging cross-border business, and eventually creating a single market.

The initiative reflects China's deep innovation and technology ambitions and also aligns with the country's Made in China 2025 masterplan: a 10-year, transformative roadmap for the future of the country's manufacturing sector.

As a global trading hub, Guangdong Province alone exported more than $US640 billion ($887 billion) of goods last year — its cities of Dongguan and Foshan are home to many of the region's factories, while neighbouring Shenzhen is already colloquially known as China's Silicon Valley.

The world's longest sea-crossing bridge, linking Hong Kong and Macau to the mainland, which officially opened last October, also binds the region together as a major driver of future economic growth.

'Combining Silicon Valley with New York City'

Hong Kong chief executive, Carrie Lam, told the Asian Financial Forum on Monday that the Greater Bay Area — consisting of about 70 million people and a gross domestic product of $US1.5 trillion ($2.1 trillion) — was of national strategic importance.

She said that over time, the Greater Bay Area would rival that of the bay areas of Tokyo and New York "in economic might".

"With the ambition to develop an international innovation and technology hub, our Bay Area has been described by some as combining Silicon Valley with New York City," she said.

According to the Hong Kong and Macau Affairs Office, the national strategy initiated by Chinese President Xi Jinping in 2015 also aims to creatively promote the "one country, two systems" principle which has allowed Hong Kong to retain a high degree of autonomy after its handover to China in 1997.

Zhang Xiaoming, director of the office, said in a statement published last week that the blueprint was completed after "significant process" was made last year.

However, there are still doubts about how well the administrations of Hong Kong, Macau, and Guangdong can integrate due to differing tax tariffs, currencies, and legal and political systems.

Alfred Wu, an associate professor from the National University of Singapore, told the ABC that on many levels, the Greater Bay Area plan looked "very superficial and symbolic".

But he said it appeared China was sending a signal to its biggest rival — the United States — that it was catching up in terms of economic clout.

'Beijing hopes Hong Kong can develop on a larger scale'

Dr Wu added he "doubted" Beijing could execute the Greater Bay Area like San Francisco did because the three regions had different laws and tax systems.

He said the reason why Tokyo, San Francisco and New York bay areas were successful was because they were developed under the same legal system and had similar incentives to be connected.

He said it was also "hard to say" whether the Greater Bay Area would corrode or enhance the "one country, two systems" principle, given that Hong Kong residents were very "sensitive" about any changes related to the principle.

A survey conducted by the Hong Kong Institute of Asia-Pacific Studies at Chinese University of Hong Kong from last June showed that respondents were uncertain about whether the plan would achieve its purpose and possible economic benefits or losses for Hong Kong.

The survey found that only 33.2 per cent of the respondents agreed the plan could achieve "complementary advantages" between the regions, while 16.4 per cent didn't think it could, while the rest were undecided.

"Hong Kong only has 7 million people, so their thinking can be [much more small scale]," Dr Wu said.

"But Beijing hopes Hong Kong can develop on a larger scale."

And while the plan aims to create more employment opportunities for people in Hong Kong, it could also ultimately dilute the identities of the individual cities, he added.

More details of the Greater Bay Area plan are expected to be announced on February 21.

Topics: business-economics-and-finance, information-technology, science-and-technology, government-and-politics, china, macao, hong-kong, asia