Ventures Dialogue

Discussions are underway about developing a special cooperative region between Hong Kong, Guangdong and Macau thus creating a Hong Kong-Guangdong-Macau Special Cooperative Region for economic integration.

The Guangdong Foreign Trade and Economic Cooperation Department, Guangdong Development Research Centre, and Guangdong Academy of Social Sciences, among others, have come together to study the integration of the three areas.  Content, feasibility, advantages and disadvantages, impact on the state and neighboring areas, possible problems and formulation of counteracting strategies, and implementation of procedures are all being studied.  The Pearl River Delta, an area within this region has been struggling in recent years and officials are eager as they hope this will economic growth by raising its comparative advantage over other regions.

Advisors have pointed out that under the Closer Economic Partnership Agreement (CEPA), one of the best ways to encourage cooperation is by addressing specific issues.  For instance, allowing the free trading of stocks, securities and futures with this region has been suggested.

Shenzhen, a city within Guangdong, became a Special Economic Zone (SEZ) in 1979 and it has since developed into the second busiest port city in China, and ranking among the top in GDP per capita.  Shenzhen also has its own stock exchange, the ninth tallest building in the world (Shun Hing Square), and six land crossings to Hong Kong.  SEZs have special tax incentives for foreign trade and investment.   If anything were to happen, a trial period would be first step as the political, economic, culture and laws of Guangdong, Hong Kong and Macau are vastly different.  Eighty per cent of Hong Kong’s economy is dominated by the service sector with finance, transportation and tourism.  Macau is known for its casinos, but manufacturing, financial services and real estate also plays a key role in its economy.  Also noted is that while Hong Kong traditionally uses the British system, Macau follows Portuguese rule of law.