One of the questions we're often asked when we develop China growth strategy is how to segment the market, in tiers of cities, clusters or regions. China is the size of a continent so one strategy for the whole of China is rarely relevant.
Should our clients take a more regional or micro view on China? FT has a featured in-depth article on the Greater Bay area - also called the Pearl River Delta (including cities such as Shenzhen and Guangzhou) plus Hong Kong and Macau. A new mega bridge is connecting these three regions, as well as a new high-speed rail system: the goal is to make this region a powerhouse to foster the next phase of growth.
The Greater Bay area is an economic region with 70 million population and an economic output of US$1.5 trillion in 2017, which is larger than Australia and close to Korea. Historically South China has its own local dialect (Cantonese), culture, climate and a very vibrant private economy with major newly successful Chinese companies including Tencent (Internet), Huawei (Technology), BYD (automobile) and PingAn (Finance) headquartered in Shenzhen.
Winning in China carries attractive rewards but it is also a daunting task. Like in much of the work we do, the definition of the unit of the analysis is critical when assessing Chinese opportunities: we think it is time to look at China growth in a more focused and "micro" way.
The Greater Bay project covers an area containing nearly 70m people with a $1.5tn economy, bigger than G20 countries including Australia, Indonesia and Mexico. HSBC expects the region’s economy to nearly double to $2.8tn by 2025.