The recently released "Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area" has made the establishment of the Greater Bay Area a hot topic for discussion. According to the "Outline Development Plan", the aim of the construction of the Guangdong-Hong Kong-Macao Greater Bay Area (Greater Bay Area) is to build the Greater Bay Area into a world-class base of emerging industry, advanced manufacture and modern service industry, as well as the world-class urban agglomeration. In China, high expectations have been placed on the prospect of the construction of the Greater Bay Area. But from a practical perspective, the Anbound's Chief Researcher Chan Kung argues that there is an urgent need for an endogenous impetus to expand the development space of the Greater Bay Area. Looking around the world, there is no urban circle without an "economic engine". The construction and development of the Greater Bay Area should put more effort on the optimization and the improvement of quality of its developmental space. In general, the construction of the Greater Bay Area should pay attention to the following issues:
First of all, from the perspective of urban space, the construction of the Greater Bay Area would require further population concentration in the Guangdong, Hong Kong, and Macao. However, from the perspective of urbanization and population growth, the space for further urbanization and population concentration in these regions may be very limited.
The Greater Bay Area covers a total area of 56,000 square kilometers and has a total population of about 70 million at the end of 2017. Its average population density is 1250 people per square kilometers, which is higher than the world's top of 1191 people per square kilometer in Tokyo and 1080 people per square kilometer in New York. There are five metropolises that has a population of more than 600 million, namely Guangzhou (14 million), Shenzhen (12 million), Hong Kong (7.4 million), Dongguan (8.25 million) and Foshan (7.4 million). Tokyo, New York and San Francisco bay areas have been extremely urbanized. Meanwhile, the urbanization level and population size of the Greater Bay Area have reached a considerable degree. Therefore, the space for further population concentration is doubtful.
Secondly, from the perspective of long-term development, China's aging population will certainly affect the development of Greater Bay Area. The expansion of the metropolitan area and the urban circle is only a matter of spatial construction. One cannot avoid the influence and pressure of the aging population. Therefore, it remains unknown to what extent can this influence be controlled. On one hand, the growth rate of China's population is declining, while first-tier cities such as Beijing and Shanghai have seen negative growth of its urban population, as people are leaving central cities. The rise of some central cities in the Midwest regions has also encouraged them to absorb surplus labor in order to achieve urbanization, which limits the potential of the Greater Bay Area to attract foreign labor. This trend would be reversed unless China's countryside shrinks further, but what we've seen so far is just the opposite.
Thirdly, as the real estate industry is constrained by multiple regulatory policies, the urbanization of the Greater Bay Area will also be affected. Under the restriction of real estate development in central cities, it is not feasible to promote the rapid development of metropolitan areas by urbanization. The Greater Bay Area does not have as much potential for urbanization like the Yangtze river delta, where Shanghai is located, and the Bohai Sea Rim Economic Circle, where Beijing and Tianjin are located. At the same time, with the continuous rise of real estate prices in the past few decades, the cost of living in cities including Shenzhen and Hong Kong has been very high. In addition, with the expansion of the metropolitan area, it is possible that the high cost of the core city will gradually affect its surrounding areas, which also will increase the cost of doing business and living in the entire Greater Bay Area. Big companies such as Huawei are also moving from Shenzhen to a lower-cost region. Therefore, it is also a great challenge to prevent the further cost increase of urban business and the cost of living in the future urbanization of the Greater Bay Area.
Fourthly, the development of the Greater Bay Area will face environmental problems. The expansion of the metropolitan area or the urban circle is unfavorable to environmental control. After all, the further expansion of the city's built-up area would in turn require greater environmental carrying capacity.
It is doubtful whether the ecological environment can be improved to accommodate the influence of the Greater Bay Area construction. Take the treatment of the Maozhou River in Shenzhen as an example. The target of the treatment is to achieve a river free of filth. The water quality should also meet five standards by 2020. As of 2017, there are still many problems in the governance of the Maozhou River. With Shenzhen's expertise in finance, human resource and operations the treatment of Maozhou River is still very challenging. In the future, water-related ecological problems caused by the inflow of the Pearl River Delta into the Greater Bay Area not only require a greater amount of investment in governance, but also more time and social resources for treatment.
Fifthly, the construction of the Greater Bay Area requires a large amount of investment and it might be subject to debt constraints. As far as current planning is concerned, the launch of the Greater Bay Area construction still requires infrastructural construction as a catalyst. This is not limited to the demand for Guangdong's local development, but also the need for integrated "connectivity" between Guangdong, Hong Kong and Macao. Many experts believe that the construction of traffic infrastructure is an extremely urgent demand for the Greater Bay Area. Comprehensive results are still difficult to achieve at this juncture. There is still room for improvement in transportation between Guangdong, Hong Kong and Macao and between the east and the west of the Pearl River Estuary. Recently, Shenzhen proposed the construction of a cross-border railway between Shenzhen Qianhai and the Hong Kong New Territories Hung Shui Kiu, which also indicates the trend of infrastructure construction. At the same time, the Greater Bay Area generally faces the need to upgrade from secondary industries to tertiary and high-tech industries. That would require a lot of investment, which will certainly cause Guangdong to bear greater debt burden. Moreover, the investment of infrastructure and technology are long-term investments with long-term returns. They also bear high risks. Therefore, it presents a challenge for the Greater Bay Area to secure stable capital inflows.
Finally, in terms of external environment, the construction of the Greater Bay Area remains uncertain. This includes the factors of trade friction between China and the United States, and the changes of international trade and investment environment of ASEAN countries along the maritime silk road. These factors bring uncertainties to the export-oriented economy and the development of urbanization in the Greater Bay Area.
In short, the construction of Greater Bay Area is a long-term developmental process. The key difficulty will be the expansion of urbanization and the construction of an integrated market, which requires not only policy promotion, but also the establishment of market systems and market expansion. Some analysts believe that the Greater Bay Area should be supported by the four core cities of Guangzhou, Shenzhen, Hong Kong and Macao, with a focus on promoting the land, industrial chain, productivity and other factors to drive the coordinated development of the whole region.
Final analysis conclusion:
The construction of the Guangdong-Hong Kong-Macao Greater Bay Area needs to recognize the constraint of the expansion of development and avoid rapid development of large-scale construction. Instead, it should be based on long-term development and systemic integration to enhance the factor's flexibility and market vitality, thereby promoting the optimization of urbanization and vertical improvement of market space.
