China’s Greater Bay Area bridge: Gateway to a new Silicon Valley? China’s Greater Bay Area bridge: Gateway to a new Silicon Valley?

China’s Greater Bay Area bridge: Gateway to a new Silicon Valley?
16 Nov 2018

The latest marquee infrastructure project in China’s Greater Bay Area, the Hong Kong-Zhuhai-Macau bridge, finally opened to public traffic on 24 October.

Billed as the world’s longest sea-crossing bridge at 55 kilometres (34 miles), it connects the Hong Kong and Macau special administrative regions with the mainland Chinese city of Zhuhai. It also includes a 6.7 kilometre (four mile) submerged tunnel between two artificial islands to circumvent the Pearl River Delta’s busy shipping route.

Completed nine years after construction began, the mega-bridge has been pursued by controversy since inception over everything from environmental concerns and complex permit requirements to construction problems and massive budget overruns.

Co-funded by the central government in Beijing and Hong Kong and Macau, the final cost of the entire undertaking is believed to have hit US$20 billion. In 2009, the sum was initially projected to be more like US$9.7 billion.

Greater Bay Area integration

The bridge’s opening comes only a month after a high-speed rail link connecting Hong Kong to the mainland started putting on services. Both are considered important in the development of the Guangdong-Hong Kong-Macau Greater Bay Area as a world-class city cluster.

China is keen to transform the region, which covers 56,500 square kilometres (21,800 square miles) of southern China, into its own version of the San Francisco Bay Area in order to establish a technology innovation hub akin to Silicon Valley.

The Greater Bay Area currently includes 11 cities, nine of which are in Guangdong province, and the rest in Hong Kong and Macau, whose cumulative gross domestic product (GDP) is US$1.69 trillion, or about 14% of national GDP. It is home to an estimated 68 million people.

Besides providing an additional transport option, the bridge will also shorten travel times. Driving from Hong Kong International Airport to Zhuhai will be cut from four hours to 45 minutes, while the commute between their ports will be halved. Bus and shuttle services along the six-lane highway will likewise run more frequently than the Hong Kong-Macau ferry.

Economic value

Debate is still rife over what real economic value the Hong Kong-Zhuhai-Macau bridge will bring.

The authorities are keen for it to be viewed as business-friendly. As a result, local and recognised high-tech firms and enterprises that have paid tax of at least RMB 100,000 (US$14,361) in Guangdong over the last three years are able to apply for permits to use it.

The same is true of Hong Kong residents who have made large charitable donations (more than US$718,050 or RMB five million) in Guangdong province, of members of the National People’s Congress and the Chinese People’s Political Consultative Conference at all administrative levels in Guangdong.

The downside is that the application procedure for drivers is complicated and a quota has been placed on how many private cars can cross. Hong Kong private car users need to acquire permits from all three cities – Hong Kong, Zhuhai, and Macau - but it takes about 12 working days to process applications for Hong Kong and Macau. Insurance from Macau and Zhuhai is also required, and car owners must reserve parking spaces 12 hours before they depart.

Uptake mixed

In the first week between 24 and 29 October, it was estimated the bridge was used 3,120 times in total, although the numbers of container trucks was in the low double digits. The authorities are arguing that things will pick up following a period of adjustment though, particularly in the logistics and cargo handling arenas.

Certainly, the bridge does seem to be gaining in popularity among individual passengers travelling by shuttle bus - about 90 buses depart from Hong Kong port between 6pm and 8pm each day and cost between US$8-10 for a single trip, depending on the time of day.

Business views mixed

As for its reception among the business community, this again has been mixed. Some Hongkongers believe the city’s increasing congestion means that better transport links will open up more housing options and make it easier for workers to get around.

But critics complain about the massive expense that constructing both the bridge and the high-speed rail link involved. They are also calling the mega-bridge a visible “umbilical cord” to the Chinese mainland. The fear is that the creation of these structures will reinforce the mainland’s political agenda for more integration, especially as trade and the manufacturing industry face external headwinds, which are only likely to get stronger as a result of China’s trade war with the US.

Such feelings are reflected in how Hong Kong businesses perceive the Greater Bay Area plan itself. While they see the benefits of strengthening connections between the dockyard, producers and consumers, there is still confusion over regulatory ambiguity and the future implications of an increasing reliance on the mainland for jobs, investment, and innovation.

So, while no one yet knows how much the creation of the mega-bridge and high-speed rail link was based on political manoeuvering, it will undoubtedly become clearer in the days to come as Beijing moves forward with regional reform, infrastructure investment, and trying to manage the US trade war.

 

By Melissa Cyrill, editor.

  

This article was first published on China Briefing

Since its establishment in 1992, Dezan Shira & Associates has been guiding foreign clients through Asia’s complex regulatory environment and assisting them with all aspects of legal, accounting, tax, internal control, HR, payroll and audit matters. As a full-service consultancy with operational offices across China, Hong Kong, India and ASEAN, we are your reliable partner for business expansion in this region and beyond. For inquiries, please email us at info@dezshira.com. Further information about our firm can be found at: www.dezshira.com.

 

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The latest marquee infrastructure project in China’s Greater Bay Area, the Hong Kong-Zhuhai-Macau bridge, finally opened to public traffic on 24 October.

Billed as the world’s longest sea-crossing bridge at 55 kilometres (34 miles), it connects the Hong Kong and Macau special administrative regions with the mainland Chinese city of Zhuhai. It also includes a 6.7 kilometre (four mile) submerged tunnel between two artificial islands to circumvent the Pearl River Delta’s busy shipping route.

Completed nine years after construction began, the mega-bridge has been pursued by controversy since inception over everything from environmental concerns and complex permit requirements to construction problems and massive budget overruns.

Co-funded by the central government in Beijing and Hong Kong and Macau, the final cost of the entire undertaking is believed to have hit US$20 billion. In 2009, the sum was initially projected to be more like US$9.7 billion.

Greater Bay Area integration

The bridge’s opening comes only a month after a high-speed rail link connecting Hong Kong to the mainland started putting on services. Both are considered important in the development of the Guangdong-Hong Kong-Macau Greater Bay Area as a world-class city cluster.

China is keen to transform the region, which covers 56,500 square kilometres (21,800 square miles) of southern China, into its own version of the San Francisco Bay Area in order to establish a technology innovation hub akin to Silicon Valley.

The Greater Bay Area currently includes 11 cities, nine of which are in Guangdong province, and the rest in Hong Kong and Macau, whose cumulative gross domestic product (GDP) is US$1.69 trillion, or about 14% of national GDP. It is home to an estimated 68 million people.

Besides providing an additional transport option, the bridge will also shorten travel times. Driving from Hong Kong International Airport to Zhuhai will be cut from four hours to 45 minutes, while the commute between their ports will be halved. Bus and shuttle services along the six-lane highway will likewise run more frequently than the Hong Kong-Macau ferry.

Economic value

Debate is still rife over what real economic value the Hong Kong-Zhuhai-Macau bridge will bring.

The authorities are keen for it to be viewed as business-friendly. As a result, local and recognised high-tech firms and enterprises that have paid tax of at least RMB 100,000 (US$14,361) in Guangdong over the last three years are able to apply for permits to use it.

The same is true of Hong Kong residents who have made large charitable donations (more than US$718,050 or RMB five million) in Guangdong province, of members of the National People’s Congress and the Chinese People’s Political Consultative Conference at all administrative levels in Guangdong.

The downside is that the application procedure for drivers is complicated and a quota has been placed on how many private cars can cross. Hong Kong private car users need to acquire permits from all three cities – Hong Kong, Zhuhai, and Macau - but it takes about 12 working days to process applications for Hong Kong and Macau. Insurance from Macau and Zhuhai is also required, and car owners must reserve parking spaces 12 hours before they depart.

Uptake mixed

In the first week between 24 and 29 October, it was estimated the bridge was used 3,120 times in total, although the numbers of container trucks was in the low double digits. The authorities are arguing that things will pick up following a period of adjustment though, particularly in the logistics and cargo handling arenas.

Certainly, the bridge does seem to be gaining in popularity among individual passengers travelling by shuttle bus - about 90 buses depart from Hong Kong port between 6pm and 8pm each day and cost between US$8-10 for a single trip, depending on the time of day.

Business views mixed

As for its reception among the business community, this again has been mixed. Some Hongkongers believe the city’s increasing congestion means that better transport links will open up more housing options and make it easier for workers to get around.

But critics complain about the massive expense that constructing both the bridge and the high-speed rail link involved. They are also calling the mega-bridge a visible “umbilical cord” to the Chinese mainland. The fear is that the creation of these structures will reinforce the mainland’s political agenda for more integration, especially as trade and the manufacturing industry face external headwinds, which are only likely to get stronger as a result of China’s trade war with the US.

Such feelings are reflected in how Hong Kong businesses perceive the Greater Bay Area plan itself. While they see the benefits of strengthening connections between the dockyard, producers and consumers, there is still confusion over regulatory ambiguity and the future implications of an increasing reliance on the mainland for jobs, investment, and innovation.

So, while no one yet knows how much the creation of the mega-bridge and high-speed rail link was based on political manoeuvering, it will undoubtedly become clearer in the days to come as Beijing moves forward with regional reform, infrastructure investment, and trying to manage the US trade war.

 

By Melissa Cyrill, editor.

  

This article was first published on China Briefing

Since its establishment in 1992, Dezan Shira & Associates has been guiding foreign clients through Asia’s complex regulatory environment and assisting them with all aspects of legal, accounting, tax, internal control, HR, payroll and audit matters. As a full-service consultancy with operational offices across China, Hong Kong, India and ASEAN, we are your reliable partner for business expansion in this region and beyond. For inquiries, please email us at info@dezshira.com. Further information about our firm can be found at: www.dezshira.com.

 

OTHER ARTICLES THAT MAY INTEREST YOU

China approves individual income tax law

A compliance guide to payroll in China

How to structure salary packages in China

 

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