Opportunity
The Greater Bay Area opportunity is more than a regurgitation of market statistics. On this page, we outline seven factors on why this is an exciting opportunity, and also, how to balance risks, resources and rewards .
The Greater Bay Area Story
At The Vanguard of Reform & Opening-Up
Shenzhen, Hong Kong and Guangzhou are the three largest cities in the Greater Bay Area (GBA), and they have been at the vanguard of China's journey of "reform and opening up" from day one.
Shekou Industrial Zone, China's first experiment at opening-up, was set up in Shenzhen in 1979.
In the same year, Chinese tasted Coca-Cola for the first time since 1949, courtesy of Swire Coca-Cola, a Hong Kong company.
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​A year later, in 1980, Shenzhen was established as China's first special economic zone; and in the same year, Beijing approved
Maxim's Caterers, a Hong Kong company, to be the first foreign investor in China - immortalized in China business folklore as "China-overseas joint venture 001".
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​In 1983, the first hotel in China to accommodate foreign guests was built in Guangzhou by Fok Ying-tung, a Hong Kong billionaire; and a year later in 1984, Guangzhou was also designated a special economic zone.
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And so, the Greater Bay Area story begins in tandem with China.
Fast Forward Forty Years
Same Story, New Paradigm
Today, the Greater Bay Area (GBA) is a key component of China's development strategy towards innovation, as well as, continued reform and opening-up.
Underpinned by the track record from day one (and ground zero), the GBA story remains the same but the narrative is more sophisticated and far-reaching this time around.
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The first forty years were largely about being the "factory of the world". This time, the new GBA paradigm connects four "core cities", namely, Hong Kong, Guangzhou, Shenzhen and Macau, and seven "key node cities" to create an economic powerhouse city cluster that is unrivalled in the world.
Once again, Hong Kong, Guangzhou and Shenzhen, together with Macau, are on the vanguard of China's reform and opening-up.
The world has changed tremendously since 1978, but if the history of China's phenomenal rise is any guide, the GBA will create and unleash unprecedented opportunities for both Chinese and foreign businesses alike.
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Click here for a copy of "Greater Bay Area: The Case For Singapore SMEs".
The Greater Bay Area In Numbers
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Look Beyond The Headline Numbers
Headline statistics are useful, but it is essential to glean below the top line and understand how the numbers stack up.
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GDP: Top three are Shenzhen, Hong Kong and Guangzhou, which contribute US$1.1 trillion or 65% of the GBA GDP.
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Per Capita GDP: Guangzhou is bumped out of top three; and Macau is the standout winner with almost US$80,000, which is 1.6 x of Hong Kong at second and 2.7 x of Shenzhen at third.
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Population: Hong Kong does not make top three; and Guangzhou, Shenzhen and Huizhou are the top three with a combined population of more than 37 million or 51% of GBA.
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Land Area: The three biggest economies are not featured; and Zhaoqing, Huizhou and Jiangmen are the top three with a combined land area of 36,000 square km or 64% of 56,000 square km for the entire GBA.
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The above is to provide a sense – a proper assessment of the GBA market opportunity requires depth, and more importantly, relevance based on your own specific circumstances.
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Click for GBA basic info.
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​Connect with us to talk about your market potential.
Tapping the Greater Bay Area
Daunting But Not Insurmountable
At first glance, the sheer size of GBA market may look daunting for a Singapore SME.
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After all, we are just a mere 8% and 1% of the population and land area of the GBA respectively.
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Also, the GBA opportunity sounds exciting but what does a US$1.7 trillion market really mean for a Singapore SME?
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Our GDP is at the US$370+ billion mark, and this puts our economy at roughly the same level as each of the three "core cities" of Hong Kong, Shenzhen and Guangzhou.
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​Our lack of population and land have never hindered us; and nowhere is this more evident than in our per capita GDP of US$65,000, which is 2.8x higher than the average per capita GDP of GBA.
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So, yes, the GBA numbers are huge, but it’s our view that we do have a seat at the table.
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There are 11 markets in the GBA, and it’s a question of picking the appropriate market or combination of markets based on your own specific circumstances - both quantitative as well as qualitative, and in this regard, it's a question of balance.
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Of course, navigating the GBA will be tough - business, culture and regulatory issues, amongst others.
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But that’s not to say that it’s not doable. The challenges may be daunting but not insurmountable.
Comfort Zone for Singapore SMEs
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Hong Kong As A Staging Area For The Greater Bay Area
Singapore and Hong Kong have been trading since the 19th century i.e. as British colonies; and bilateral trade in 2019 topped S$65 billion, making Hong Kong our fifth largest trading partner.
Obviously, we are two different markets. But, due to a shared colonial heritage, Singaporean companies are familiar, and largely comfortable, with the underlying principles of Hong Kong’s tax, regulatory, economic and legal systems.
Like Singapore, Hong Kong is a key global financial hub; and it is the most international city and open economy in the GBA, which means unrestricted international movement of funds and low barriers.
With the exception of Shenzhen for technology, Hong Kong has been and will continue to be the GBA pacesetter, and it is therefore an ideal market for customizing products and services for the GBA.
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Read our experiment and suggestions for a Singapore SME.
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Hong Kong is a "sandbox" (to use a technology term) and therefore ideal as a staging area for Singapore SMEs looking to tap the GBA.
Pivot For The Greater Bay Area
Hong Kong's Unique Gateway Advantage
To put this in perspective, Hong Kong’s position at the doorstep of the GBA is not unlike Singapore's position in ASEAN except for one vital difference: whereas ASEAN is a multi-countries-bloc, the GBA is in one country (but two systems), and it has a prevailing culture and history i.e. Guangdong.
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Hong Kong is as internationally connected with the world as it is internally integrated with the GBA, and this offers a unique strategic option that cannot be replicated in Shanghai, Beijing or any other cities in China.
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Hong Kong is currently caught in some very serious US-China crossfire but it has a history of resilience dating back to the Opium war in the 19th century.
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So, despite the challenges, it’s our view Hong Kong is ideal for a pivot market for the GBA.
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Connect with LB, our Singaporean partner, who's been in Hong Kong since 1995 and chat about anything from the Opium War of 1839 to the massive protests of 2019.
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Read about the story of Mr Tsang, a HongKonger looking for Singapore SME services.
Government Policy & Support
From Singapore to Hong Kong & The Greater Bay Area
Singapore and Hong Kong government policy support for SMEs are among the most comprehensive in the world.
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Enterprise Singapore, the government agency tasked with enterprise development, has a program, aptly coined as “Go Global”, to assist Singapore companies on their international pursuits including GBA.
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We strongly encourage Singapore SMEs that are interested in tapping the GBA to explore the Enterprise Singapore website for more information and avail themselves of the available resources.
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Likewise, Hong Kong has a wide array of policy and support infrastructure, and notable government entities include InvestHK and the Trade Development Council, amongst others.
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Most importantly, China has a wide array of preferential GBA policies for Hong Kong, and this provides qualifying Hong Kong companies and professional firms with a strong strategic advantage for market access in the GBA.
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As a SME, we are also a beneficiary of government policy and support. Connect with us to have a chat.
Mitigate Risk Exposure
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Balance Of Risks, Resources & Rewards
The GBA opportunity is huge as it is complex, and risks mitigation is vital.
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It’s essential to undertake a preliminary desktop assessment of the risks before committing any significant resources.
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But, in our experience, a desktop review may be insufficient and it can lead to more questions; and the surest way of finding the answers is to be in business on-the-ground (not from the desk).
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Herein lies the classic “chicken & egg” dilemma.
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Our “battle scars” are living proof of the risks of doing business in China: regulatory, competition, misappropriation, intellectual property and partnership disputes, amongst others.
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We believe that the overarching principle for managing risk in China is “balance”.
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A “balanced” solution for resolving the “chicken & egg” dilemma is to mitigate risks with a limited presence in the GBA, first in Hong Kong, and then in Guangdong.
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Essentially, the objective of a limited presence is to undertake in-market targeted activities for marketing and business development and to gather market intelligence.
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Without committing significant resources, this will provide more clarity on the appropriate balance of risks, resources and rewards, which is one of the cornerstones of a GBA strategy.
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Find out how our cost-effective BPO services can help in this regard.