A greater Pearl River Delta – Macao to integrate more closely with PRD during Five-Year Plan

10 June 2016

During the Five-Year Plan (2016–2020), Macao will, with Hong Kong, integrate more closely with the Pearl River Delta (PRD) and nine other mainland provinces, as it seeks to consolidate its role as a world tourism and leisure centre and diversify its economy.

This is an important year in China’s planning process, the first of the 13th Five-Year Plan. For the first time, Macao has also drawn up its own five-year plan, to work in harmony with the central government’s plan and define its own role in the national economy.

In 2004, the State Council proposed a “9+2” strategy to create an enlarged Greater PRD zone that will cover a third of China’s population and also one third of its economic output. The 13th five-year plan promulgate in March this year reaffirms the significance of the PPRD.

The increased exchanges between the two SARs will help to maintain their long-term prosperity and stability.

Also in March, Chief Executive Chui Sai On presented to the central government a “Report on the Promotion of Moderate Economic Diversification in the MSAR”. It was the first master development plan for the city.

It called for the cultivation of new industries with economic potential, medium and small-size local enterprises and encouraging professionals and young people to create their own companies.

This is in addition to the SAR’s long-standing goals of being a world tourism and leisure centre and a platform for commercial co-operation between China and Portuguese-speaking countries (PSCs).

“This Five-Year Development Plan outlines the city’s key aspirations and a set of achievable goals,” the Chief Executive said on 15th March. “Its implementation will lead Macao to further social and economic achievements.”

In comments on Hong Kong and Macao at the National People’s Congress in early March, Prime Minister Li Keqiang said that both had a bigger role to play in China’s economic development, according to their respective strengths. “Beijing will further develop co-operation between the mainland and the two SARs, which will promote the competitiveness of both,” he said.

The 13th Five-Year Plan devotes an entire chapter to the two SARs, as with the previous five–year plan.

“We support Hong Kong and Macao to take part in the nation’s two-way opening-up and ‘One Belt, One Road’ initiative… and (to deepen) exchanges and co-operation among the mainland, Hong Kong and Macao, in areas such as social issues, livelihood, culture, education and environmental protection,” the plan said.  Beijing will continue to support Macao’s goal to become “the world’s tourism and leisure centre,” it said.

All these initiatives show that Macao’s economy will become more closely linked to that of Guangdong and other mainland provinces over the next five years.

Pan Pearl River Delta

The Pan Pearl River Delta is an ambitious concept. It includes Fujian, Jiangxi, Hunan, Guangxi, Hainan, Sichuan, Guizhou and Yunnan as well as Guangdong. This plan of the State Council plans to “connect the dots” between the existing Closer Economic Partnership Agreement (CEPA) granted to Hong Kong and Macao, as part of the central government’s plan to bring prosperity to the inland and western provinces, that are poorer than those on the eastern seaboard.

The document calls for speeding up of construction of the Hong Kong-Zhuhai-Macao Bridge and the Guangzhou-Shenzhen-Hong Kong high speed railway, as well as co-operation between airports in the region.

“The authorities will support mainland enterprises to set up regional headquarters in Hong Kong and consolidate its role as an offshore RMB centre,” it said. It will take measures to make it easier for Hong Kong and Macao residents to work and live in the mainland, it said.

“The creative industries in Hong Kong and Macao will be encouraged to participate in the mainland entertainment industry… The free trade zones in the region will implement innovative policies to boost trade and financial sector development and deepen co-operation with Hong Kong and Macao,” it said.

The maritime sector is another area for common development between Fujian, Guangdong, Guangxi and Hainan, with increased R & D spending in it.

In trade, the State Council proposed the integration of the provincial economies to create a common market, with common standards and principles. It also advocates “harmonised, commonly enforced market rules that will facilitate the free flow of goods to the mainland.”

Ports within the region will be linked to a central customs clearing IT infrastructure so that goods entering will not need to undergo multiple clearance procedures.

Local market regulators will be expected to enhance data sharing, while enforcement action by the different legal systems in the nine provinces will be gradually harmonised. In addition, a unified credit database system will be established for the nine provinces.

Macao’s future

On 1st March, the SAR government presen-ted to Beijing its plan for Macao’s economy over the next five years.

“The report considers Macao’s comparative advantage(s) and negative factors, especially its part in China’s 13th Five-Year Plan, the ‘Belt and Road’ initiative and regional opportunities, to find… future opportunities.”

On 15th March, the Chief Executive elaborated on the plan during a meeting with Professor Hu Angang, Director of the Institute for Contemporary China Studies at Tsinghua University. He is a consultant to Macao’s Five-Year Plan and a member of the commission that drafted the national Five-Year Plan.

“Having a clear development plan spanning several years is crucial for a community and for a country,” said Hu. “This view is based on my research, which compared the 20 countries in the world which had achieved the best economic performance over the past three decades.”

Chui said that such a blueprint for Macao was a welcome innovation for the process of government. “One of the challenges is to develop the guidelines for each stage of the Five-Year Development Plan,” he said.

He added that Professor Hu’s advice was particularly important in relation to Macao’s deployment of resources, setting targets and the way it coordinated its development with that of the whole country.

Macao’s advantages

Hu said that Macao’s special status under the ‘One Country, Two Systems’ policy and its role as a free port were important advantages which the city could draw on to assist the development of the whole country.

“It can also draw on the support of other national policies in order to create fresh economic opportunities. In this way, Macao’s prosperity can grow in parallel with the nation’s prosperity.”

“The policy of developing Macao as a World Centre of Tourism and Leisure will help the city’s position in relation to the country’s development,” he said.

He said that economic growth on the mainland and the over 100 million visitors it exports worldwide can benefit the SAR more if the city pushes itself to develop the tourism industry to international quality standards.

“The diversification of Macao’s industries can benefit from a move toward trade liberalisation and further exploitation of Free Trade Zones,” he said.

“E-commerce should be a further avenue in strengthening ties with the mainland. Last year 238 countries were involved in cross-regional trading,” he said, adding that cultural industries were a priority in the course of economic diversification.

Main construction projects for the next five years include the Macao Light Rail Transit; the fourth bridge between the peninsula and Taipa; the upgrading of the Macao Refuse Incineration Plant; and construction of a new health service complex.

The plan for the SAR includes other policies – giving local residents priority in employment; investing in new and developing industries; diversifying and internationalising tourism products; improving the medical system; strengthening manpower through continued education; and improving the consultation mechanism of the government.

Hu also mentioned five key themes in the national Five-Year Plan – innovation, co-ordination, green development, opening up and sharing – all related to the existing national and local policy of “putting people first.”

Guangdong Five-Year-Plan

Guangdong is one of China’s richest provinces and the one closest to Macao. It too has ambitious plans for the next five years; the SAR must find ways to fit into these plans.

At the end of February, the State Council approved the plan of Guangzhou, the provincial capital, to become an international trade centre and regional transportation hub with a target population of 18 million.

In approving the plan, the State Council asked Guangzhou to integrate further road, port, rail and air links with Hong Kong and Macao.

“It should use its pilot free-trade zone in Nansha to explore a new co-operation model with the two SARs,” it said. The plan also calls for the Nansha FTZ to experiment with deeper reforms in its economic and legal systems, so businesses can advance the ‘One Belt, One Road’ strategy, which sees Guangzhou as a key hub.

Challenge for Macao

The national Five-Year Plan, the plans for the Pan Pearl River Delta and for Guangzhou set out clearly the economic future of the next five years.

The challenge for Macao companies, entre-preneurs and individuals is to take advantage of the opportunities presented to them.

Yao Jian, deputy director of the Central Government Liaison Office in Macao, said that, to appeal to visitors, the SAR should develop new tourist products and give them more choices.

In an interview with Macao Daily, he said that, while group tours went to fixed places, individual visitors could have a deeper experience, walking on foot, and could, for example, visit Macau University, as many go to see Harvard, Beijing and Tsinghua universities. “They can experience culture and history, they can go to hotel resorts. We should give them more, different choices.”

The city should offer modernised hotels, shopping, food and performances, he said.

He also proposed greater use of the entry posts with Hengqin, to reduce the pressure on the main Border Gate and take visitors directly to sites in Taipa, so that they would not increase congestion in the peninsula.

“The central government hopes that, while maintaining the basic number of 30 million tourists (a year), the structure of visitors will gradually move toward individual travellers, meetings and family holidays. The numbers will not evidently increase but the quality, atmosphere and level of consumption will improve the interaction with Macao society. So Macao residents have a comfortable living environment – this is more important,” he said. (Macao Magazine, by Ou Nian-le)