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The Greater Bay Area Initiative: Connecting A Region Through Shared Interests

27 December, 2018
  • Jackson Kam

    Career Practice Leader, Talent Strategy, Mercer, Hong Kong

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“A fair distribution of pay and opportunity is essential to ensuring the free movement of talent in China's Greater Bay Area region.”

It is human nature to disagree. From how to make the perfect soup dumpling to which system of government works best, people have always perceived the world (and dumplings) in different ways. Our propensity to disagree makes China’s Greater Bay Area (GBA) Initiative a marvel of human collaboration. The GBA Initiative is an ambitious plan to connect 11 municipalities spanning the Guangdong province, Hong Kong and Macau—and align their financial, cultural, geographic and governmental interests.  A daunting, yet immensely exciting challenge, indeed.

Background: From Grand Idea to Modern Reality

In a 2017 government report released by Premier Li Keqiang, China officially announced its intentions to move forward with plans to develop the GBA—which, before that point, had only been theoretical. The idea was first introduced in the 2011 study, “The Action Plan for the Bay Area of the Pearl River Estuary.” This directive from Beijing thrust the plan into the international spotlight, outlining the “city cluster” strategy that leverages the distinct financial, cultural and economic assets of the 11 participating municipalities.1 However, though the region may be geographically close, the participating societies are remarkably different.

For example, differences in regulatory instruments and policies, business practices and tax structures, and cultural perspectives and priorities present challenges to creating a seamless and streamlined alignment of resources and capabilities. The key to success for the GBA is the free flow of everything from talent and information to capital and resources. Significant progress has already been made. China has built the 55-kilometer Hong Kong-Zhuhai-Macau Bridge and expanded the high-speed rail network into Hong Kong. This infrastructure represents only part of a sweeping initiative to facilitate the free flow and exchange of ideas, capital and resources. 


(Source: Research Gate_W Martin de Jong)

 

Aligning Cultural and Economic Differences

Convincing each of the 11 municipalities in the GBA to pursue regional business objectives while prioritizing the well-being of the collective group will require some savvy and diplomatic governance. There will be hurdles to aligning the legal, economic, technical, workforce and geographic complexities of the initiative.2 Companies in the GBA region must be open to innovative thinking. Leaders and policymakers must explore a variety of strategies and business models, from joint ventures and strategic partnerships to mergers and acquisitions. Each region must embrace these issues with a focus on long-term success.

The scope of cooperation and transparency required by the GBA is enormous. The comprehensive framework ensures there will be agreeable mechanisms in place to solve disputes on everything from workforce immigration legalities and environmental policies to project development benchmarks and operational standards. However, today, this complex relationship is largely theoretical as many companies from all over the GBA region continue to navigate cultural, regulatory and operational differences. It will take time to integrate the key processes that directly impact cross-border talent. For example, sometimes Mainland staff who work in Hong Kong are stuck in Shenzhen or Guangzhou for days or even weeks as they await visa extensions. Examples like these demonstrate the role human capital plays in the success of the GBA Initiative. Ultimately, figuring out how to manage human capital across borders and cultures will be critical.

To address these realities, many multinational companies are increasingly hiring Mainland graduates who studied in Hong Kong universities. These graduates are familiar with cultures in both markets, making them suitable to work on GBA-related assignments. Additionally, many companies are actively working to manage the disruption caused by entrenched but disparate policies: differences in salaries, tax regimes, medical benefits and the quality of education available to employees and their families. A fair distribution of pay and opportunity is essential to ensuring the free movement of talent in the GBA region.

Leveraging the Power of Compromise

Perhaps the most impressive policy achievement that contributed to the development of the GBA was resolving the territorial disputes between Hong Kong and Shenzhen over the Lok Mau Chau Loop.3 This swath of territory, both geographically and symbolically, separated the people and ideals of western-influenced Hong Kong from the Beijing-centric interests and culture of Shenzhen. The most poignant aspect of this agreement is the display of a true willingness by both parties to compromise in order to advance their interests.

The Chinese mainland, after all, offers Hong Kong access to one of the world’s most lucrative marketplaces. For Shenzhen, Hong Kong is the gateway to the global economy. This agreement serves as a proof of concept for the entire initiative – finding creative ways to work together to navigate cultural differences and seemingly divergent business priorities. Together, Mainland China, Hong Kong and Macau can create a revolutionary geographic center for technological innovation, financial influence and international trade. The stakes are high, and the whole world is watching.

The GBA, after having surpassed the San Francisco Bay region, ranks second in terms of global GDP for bay-area regions, behind only Tokyo Bay. In fact, with a current GDP of US $13 trillion and a population of 70 million, the GBA region represents 12 percent of China’s entire economy.4 With vastly different political, financial and institutional systems in place, people infrastructure will be key to sustainable and equitable growth for the collective region. Effective cross-pollination requires cutting-edge insights from human capital management experts, thoughtful business leaders and government policymakers. For those of us with expertise in the region, this initiative offers groundbreaking opportunities to build partnerships and negotiate unparalleled collaborations in southern China.

It’s all about compromise, except when it comes to soup dumplings; real soup dumplings have 18 pleats. Just ask your mom. 

For more information on human capital management in China visit: Mercer (Mercer China).

 

 

1News Analysis: New Opportunities For Hong Kong in Emerging ...
www.xinhuanet.com/english/2017-03/11/c_136121179.htm

2China's Greater Bay Area Puts Hong Kong in the Lead As Super Connector To the World
https://www.dorsey.com/newsresources/publications/client-alerts/2018/02/chinas-greater-bay-area-puts-hong-kong-in-the-lead

3Hong Kong’s Startup Scene: the Future Of Mainland–hong ...
www.china-briefing.com/news/2017/08/08/hong-kongs-startup-scene...

4 China Is Building 19 'supercity Clusters'
Andrew Sheng-Xiao Geng- Fung Global Institute- University of Hong Kong - https://www.weforum.org/agenda/2018/09/how-cities-are-saving-china

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Juliane Gruethner | 31 Oct 2019

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Alice Harkness | 31 Oct 2019

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Wejdan Alosaimi | 17 Oct 2019

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The focus on increasing privatization and other non-oil industries — such as construction, finance, healthcare, retail and religious tourism — will create new opportunities for Saudi businesses and entrepreneurs.4 Creating a Future Through Indigenous Resources   Saudi Vision 2030 addresses many of the local, cultural challenges facing the nation, such as the role of women in the workforce and society, the impact of digital transformation and automation, and the need to modernize the sensibilities of Saudi businesses. Allowing women to drive and granting them greater access to economic prosperity — with the goal of increasing women's participation in the workforce from 22% to 30% — has generated positive responses with global investors. The 2030 plan also prioritizes domestic issues and the overall health of its citizens, with the stated objective of raising the average life expectancy from 74 to 80 years and aggressively promoting daily exercise and healthier lifestyles for all Saudi citizens.5 The Saudi government also seeks to bring its society into the digital age by implementing more e-government services that will connect citizens to resources through smartphones, data-centric operations and other technologies. This push will also drive human capital out of government jobs and into the private sector. According to the Mercer Global Talent Trends 2019 report, companies in countries such as India, Brazil, and Japan will experience a 70% increase in automation, boosting their need — like Saudi Arabia — to find new roles and professional development opportunities for workers. The 2030 plan offers an ambitious vision for the nation's indigenous resources. Empowering women and integrating modern technologies throughout its economy and government are just part of this comprehensive strategy. By inviting the global economy to invest in its progressive financial mechanisms and bolster tourism through campaigns highlighting the nation's history, Saudi Arabia is poised to lead its people, and the world, into a future forever defined by a new, modern view of the future. Will it work? The world will know in 2030. Sources: 1. Kingdom of Saudi Arabia. "Saudi Census: The Total Population." General Authority for Statistics, Accessed 11 July 2019,https://www.stats.gov.sa/en/node. 2. Mohammed bin Salman bin Abdulaziz Al-Saud. "Vision 2030." Vision 2030, 9 May. 2019, https://vision2030.gov.sa/en. 3. Critchlow, Andrew. "India is too important for oil titan Saudi to ignore." S&P Global Platts, 6 Mar. 2019, https://blogs.platts.com/2019/03/06/india-important-oil-saudi/. 4. Nuruzzaman, Mohammed. "Saudi Arabia's 'Vision 2030': Will It Save Or Sink the Middle East?" E-International Relations, 10 Jul. 2018, https://www.e-ir.info/2018/07/10/saudi-arabias-vision-2030-will-it-save-or-sink-the-middle-east/. 5. "Saudi Arabia Vision — Goals and Objectives." GO-Gulf, 14 Jul. 2016,https://www.go-gulf.com/blog/saudi-arabia-vision-2030/.

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