China’s digitalisation push seeks ‘digital energy’ to spark vital tech, economic growth in Greater Bay Area

China is converging its manufacturing, trade and technology strengths in the Greater Bay Area development zone to spearhead digitalisation, aiming to break through technology curbs from the United States and prioritise growing the digital economy.

In a three-year action plan unveiled on Tuesday, China’s southern province of Guangdong pledged to build a so-called Digital Bay Area to provide cross-boundary data services, that would include the special administrative regions of Hong Kong and Macau.

Guangdong plans to establish national data exchange hubs in its cities of Guangzhou and Shenzhen, create cross-border data whitelisting – which allows preapproved data to cross borders – and build offshore data centres in specific zones of the Greater Bay Area to maximise its technology, manufacturing, finance and human capital.

In its detailed 15-page blueprint, Guangdong released details about its goals of applying digitalisation to its industrial and supply chains to move up the value chain, fostering tighter tech collaboration between top companies and luring more foreign investments through shared data.

The construction of the ‘Digital Bay Area’ will become a new economic growth point in the Bay Area

Guangdong provincial government

“By 2025, the construction of the ‘Digital Bay Area’ will have been basically completed, with effective docking of the digital regulatory rules of the Greater Bay Area, efficient connectivity of new infrastructure construction, and balanced development of computing and storage capacities,” the Guangdong provincial government said.

“The construction of the ‘Digital Bay Area’ will become a new economic growth point in the Bay Area, and ‘digital energy’ will become a new driving force for high-quality economic and social development.”

The Greater Bay Area refers to Beijing’s scheme to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an integrated economic and business hub. The gross domestic product of the zone exceeded 13 trillion yuan (US$1.8 trillion) last year, surpassing South Korea, Australia, Brazil and Russia, to reach the level of the world’s 10th largest economy.

China’s manufacturing powerhouse and top economic engine of Guangdong is seeking fresh opportunities to navigate Washington’s tech chokepoint, while also achieving its ambitions to elevate the industry up the value chain.

Guangdong plans to infuse digital technologies to ensure industrial and supply chain stability, smoothness and cost-effectiveness.

The provincial government is also encouraging leading enterprises to establish collaborative laboratories to overcome challenges in key areas, including general artificial intelligence and high-end computing, while applying intelligent robots to smart manufacturing.

As China’s technological powerhouse, known as China’s Silicon Valley, Shenzhen is home to Huawei Technologies and new-energy carmaker BYD.

Peng Peng, executive chairman of the Guangdong Society of Reform, said a unified data market and also new ways to explore cross-border data flows could help lift the region’s competitiveness.

The government can at least try data exchange in the university campuses in Hong Kong, Macau and the Pearl River Delta at first

Peng Peng

“It is an alternative approach to expand Shenzhen’s digital technology overseas through its neighbouring international cities of Hong Kong and Macau,” he said.

Guangdong has the potential to make the region a strong global bay area as it already has China’s top level of digitisation, is its top province by gross domestic product and has a strong manufacturing base, Peng added.

But different systems in Hong Kong and Macau suggest immense difficulties in sharing information, said Peng.

“The government can at least try data exchange in the university campuses in Hong Kong, Macau and the Pearl River Delta at first,” Peng added.

It will enable enterprises and the public in both places to enjoy simple and convenient cross-boundary services

John Lee Ka-chiu

According to the plan, Guangdong would also look to access investment promotion data from Hong Kong and Macau to efficiently attract more foreign investors.

It also aims to lower the cost of cargo clearance and shorten the movement of cargo by introducing faster data flow from ports and airports with neighbouring Hong Kong and Macau, to maintain its position as China’s leading foreign trade province.

The idea of the Digital Bay Area was also included in Hong Kong’s 2023 policy address by Chief Executive John Lee Ka-chiu last month.

“It will enable enterprises and the public in both places to enjoy simple and convenient cross-boundary services. It also facilitates the provision of public services and investment in the GBA, from taxation and company registration, to talent admission and elderly services,” Lee told the Greater Bay Area Conference on Wednesday.