Recently, the Central Committee of the Communist Party of China and the State Council issued the Master Plan of the Development of the Guangdong-Macao Intensive Cooperation Zone in Hengqin (hereinafter referred to as the "Master Plan"). This is another important development initiative of China in the field of regional economic development under the new development pattern.
With regard to why should the Guangdong-Macao Intensive Cooperation Zone in Hengqin (GMICZ) be built, the Master Plan clearly points out that the original intention of building the Hengqin New Zone was to create conditions for the diversified development of Macao's industries. The development and opening up of the Hengqin Guangdong-Macao in-depth cooperation zone under the new situation is a key measure in the in-depth implementation of the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area. This is also a major measure to strengthen the practice of One Country, Two Systems, which is conducive to promoting the long-term prosperity and stability of Macao and integrate it into the overall situation of national development.
Figure: Hengqin and Macao
Considering the current international situation, as well as the situation within China, and judging from the content of the Master Plan, the development of the in-depth cooperation zone between Hengqin Island and Macao is not only of geo-economic significance but also geopolitical as well. ANBOUND researchers believe that it is extremely necessary for Zhuhai, Macao, and related companies and investors to understand the importance of building the Intensive Cooperation Zone.
First of all, the GMICZ will expand the geographical space of Macao's development and increase the space for the economic development of Macao. This, in turn, will create spatial expansion for the development of Macao. The Master Plan stipulates that the scope of implementation of the cooperation zone is the customs supervision area between the "first line" and "second line" of Hengqin Island, with a total area of about 106 square kilometers. Among them, the line between Hengqin and the Macao Special Administrative Region is set as the "first line"; the line between Hengqin and other areas within the customs territory of Mainland China is set as the "second line". Compared with Macao's existing land area of 32.9 square kilometers, the "expanded" area is more than four times the existing land area.
Second, through the Intensive Cooperation Zone, Macao will be further integrated into the Guangdong-Hong Kong-Macao Greater Bay Area, and the industrial relationship between Macao and the Mainland will be increased. This also means that there will be more integration of it with the Mainland's economy, so that the Macao Special Administrative Region can participate more in the "inner circulation" within the context of China's dual-circulation. The Chinese central government has previously promoted the construction of the Greater Bay Area and is preparing to develop economic cooperation of southern China with other bay areas in advanced countries. However, as China's geopolitical environment has continued to deteriorate in recent years, the international space for external development of Hong Kong and Macao has been objectively restrained. As it faces external obstructions, China is seeking its development internally through the pragmatic policy option of inner circulations. The intensive cooperation will also promote the interconnection of infrastructure between the two places. This will lend support to the extension of the Macao light rail to the cooperation zone to connect with the Zhuhai urban rail network and integrate into the Mainland's rail transit network. In addition, such measures will also accelerate the construction of corridors connecting the cooperation zone to surrounding areas, and advance the planning and construction of Guangzhou-Zhuhai (Macao) high-speed rail, Nansha-Zhuhai (Zhongshan) intercity railway and other projects. All these will in turn strengthen the functional coordination and industrial linkage between the cooperation zone, Zhuhai Airport and Zhuhai Port.
Third, the construction of the Intensive Cooperation Zone will help promote Macao's industrial and economic diversification and change the pattern of its current condition of single-industry development. It is well known that the gaming and gambling industry is the most important pillar industry in Macao, with more than 30 million tourists visiting Macao every year. In 2018, Macao's gaming revenue was MOP 303.879 billion, of which casino revenue reached MOP 302.846 billion. In 2019, the gaming and gambling industry's gross revenue was MOP 292.455 billion. Affected by COVID-19 in 2020, Macao's annual gross gaming revenue fell to MOP 60.441 billion, a decrease of 79.3% from 2019. For many years, Macao has always hoped to promote the diversification of industries and of the economy, similar to what Las Vegas has done. In addition, other than continuing the development of the gaming industry and tourism in the future, Macao is also preparing to develop technology research and development and high-end manufacturing industries, especially those with its own brands like traditional Chinese medicine, cultural tourism, exhibition, trade, and modern financial industries.
Fourth, the Intensive Cooperation Zone will expand Zhuhai's special institutional space. Zhuhai is a special economic zone of China, while Macao is a special administrative region of China, thus making it a "special zone within a special region". According to the Master Plan, considering the objective reality of the whole island of Hengqin, the Intensive Cooperation Zone will be divided and classified based on policy management. The Hengqin campus of the University of Macao and the Macao jurisdiction of the Hengqin port are managed by the Macao Special Administrative Region government authorized by the Standing Committee of the National People's Congress. They are subjected to relevant Macao systems and regulations and are separated from other regions by physical fences. Guangdong and Macau jointly build and manage a shared area, adopt electronic fence supervision and catalogue list methods, and implement special policies for eligible market entities.
Fifth, the establishment of an Intensive Cooperation Zone can balance the economic development of the eastern and western sides of the Pearl River Estuary. Although they are located within the same Pearl River Delta region, the two sides of the Pearl River Estuary present a pattern of "stronger east (Hong Kong + Shenzhen) and weaker west (Macao + Zhuhai)". Taking 2019 as an example before the outbreak of the COVID-19 pandemic, Macao's GDP that year was USD 59.124 billion (approximately RMB 412.686 billion), Zhuhai's regional GDP was RMB 343.589 billion, and the two totaled RMB 756.275 billion. In the same year, the total GDP of Hong Kong was USD 358.306 billion (approximately RMB 2500.976 billion); Shenzhen was RMB 2692.709 billion. The total economic scale of Hong Kong and Shenzhen that year was RMB 51936.85, which was 6.87 times the economic scale of Macao and Zhuhai. After the establishment of the Intensive Cooperation Zone, it will help Macao and Zhuhai to narrow its economic gap with Hong Kong and Shenzhen.
Final analysis conclusion:
Overall, the Master Plan of the Development of the Guangdong-Macao Intensive Cooperation Zone in Hengqin is an important measure to promote the economic development of Macao and Zhuhai. It will not only bring about the development of urban economy and regional economy but also carries subtle geopolitical significance.
