Early this year, the National Development and Reform Commission (NDRC) announced policy backing for new infrastructure that would support and accelerate the growth of the mainland’s digital economy. While in May, the Central Government announced that local government would be authorised to issue a total of 3.75 billion yuan in special bonds for investment in such projects. The private sector was also expected to play its part.
Although not an exhaustive list of areas which would receive backing, the NDRC statement does focus on seven specific types of technology and infrastructure: 5G, ultra-high-voltage transmission power lines, intra-city high-speed railway lines, electric vehicle charging points, big data centres, AI, and the industrial internet.
Professor Witman Hung, Principal Liaison Officer for Hong Kong Shenzhen Qianhai Authority, said the Free Trade Zone aims to play a full part in the development of this national policy. “Internally, within Qianhai, we are exploring how to enhance our role as the growth engine and the major platform for Hong Kong and Shenzhen cooperation.”
The Free Trade Zone was established in 2010, but it was two years later, following a visit by President Xi Jinping, that it really began to blossom as a potential prototype for future cooperation between Hong Kong and the cities in the Greater Bay Area (GBA). By 2019, Qianhai was ranked number one in the country, in terms of GDP per square kilometre, with a figure of 15.26 billion yuan. Within Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, published early last year, Qianhai was given three main roles: first, as a zone for deeper legal cooperation; second, as a key engine of cross-border cooperation; and, third, as the new international city-centre for Shenzhen.
There are currently two distinct aspects to the digital economy targeted by the NDRC proposals, Professor Hung explained. First, there is the digitally-enabled new economy whose existence is predicated on the emergence of digital technology. Many big data-driven applications fall into this category. Second, those elements of the traditional economy which have been transformed by digital technology, witnessed by developments in areas such as FinTech and e-commerce.
“However, I predict that in 10-years time there will be no real difference between ‘the economy’ and ‘the digital economy’,” he added. By then, only a very limited number of person-to-person services will not be directly impacted by the new technology.
A significant proportion of Qianhai’s GDP and tax income still comes from businesses engaged in the traditional finance sector, such as asset management and private equity firms, which are not fully digital from end to end, but whose use of technology takes a more hybrid form.
Even so, Professor Hung pointed out, Qianhai was the first place in the country to have full 5G coverage, and its engagement with the digital economy is most likely to come in the field of software development and as a base for the establishment of big data centres. Of the seven categories of infrastructure highlighted by the NDRC, the industrial internet is of particular interest to Qianhai, especially when linked with developments in 5G, big data centres and AI.
“In the past, robotics on the shop floor, for example, were usually connected via wifi and could only perform a limited range of functions,” he noted. But the application of 5G and the industrial internet, in a wide variety of contexts, is a potential game-changer for traditional industries. This opens up the prospect of much greater customisation in products and services – such as in the detailing on cars – along with an increase in competitiveness. It also promises to boost manufacturing efficiency. While, the driver-less trailers now being used in the port at Qianhai, are just one example of the effective application of the industrial internet in the logistics industry.
As well as investing in digital and other infrastructure to boost connectivity, and fuel innovation and growth, in the last two years Qianhai has also taken significant steps towards becoming a new city-centre for Shenzhen, and an attractive place to live as well as work.
The Free Trade Zone now has 179 office buildings in use, construction work on 27 other skyscrapers has been completed, and a number of major rail and ferry links have been, or are in the process of being, extended and upgraded.
While, in the last two years, parcels of land in Qianhai have been set aside for the construction of cultural facilities, hotels, exhibition halls, and an arcade of restaurants, and international competition has been launched to find the best design for a large new museum.
Preferential GBA policies will also enable Hong Kong- and Macao-based residents who work or live in Qianhai, to buy homes in the areas, enjoy access to medical services, and give their children the right to the same education opportunities as their mainland counterparts.