The fledgling Greater Bay Area needs ‘affable guidance’

From the examples of three bay areas, namely New York, San Francisco and Tokyo, it is quite transparent in their fledgling phases that responsible governments provided sufficient guidance, instead of allowing the market to grow freely. Only when the bay areas adequately matured did the government allow the free market system to reign, said Feng Da Hsuan, chief adviser of the Silk Road iValley Research Institute and Liang Haiming, chairman of China's Silk Road iValley Research Institute in article The fledgling Greater Bay Area needs ‘affable guidance’.

The co-authors said that the guidance is to ensure the GBA local governments can provide and strengthen legislation to prevent a malicious monopoly from raising its ugly head to stifle innovative enterprises and dismantle consumer rights and interests. With this guidance, there will be room for SMEs to survive and grow.

The GBA local governments must proactively guide small and medium science and technology enterprises to learn from their stronger market-leading peers so they won't be blocked from entering the market. Last but not least, the government should allow large-scale leading enterprises to develop further, so that through natural competition, they can gain strength to eventually reach top international status, the experts stressed.

The full text of the article is as follows:

The long-awaited development plan for the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) was announced last week. Given its appropriate timing and enormous opportunities, this development has undoubtedly provided the world a great of deal room to imagine its possibilities. However, constructing the GBA is confronted by the unique, complex and unprecedented political and social structures of "one country, two systems," three customs and three currencies.

These structures underpinning the GBA can be both an advantage and a realistic challenge. Deep consideration needs to be given to ensure that GBA emerges not just as a world class bay area, but one that is enriched with Chinese characteristics.

Soon after the GBA was announced, scholars suggested that its development could leverage the lessons of the EU or eurozone models. As such, GBA construction should adopt a tightly coordinated mechanism and utilize market principles to overcome the challenges that will surely be met in interconnecting and integrating Hong Kong, Macao as well as nine cities in Guangdong Province.

Unfortunately, such a proposal is easier said than done. Indeed, the success of the coordination mechanism must depend on "uniting the people as one" rather than "unity in diversity." Even leaving the chaos created by Brexit aside, for the remaining countries within the eurozone, the "unification in diversity" of the 18 countries is like a mosaic of different nationalities and cultures. Becoming a unified body and getting on the same page have proved to be difficult.

What's more, the joke about the eurozone is that some of the members have acted as though "while everyone should help me, I'll only help myself." Weaker members such as Greece and Portugal, protected by the eurozone umbrella, have borrowed and still are borrowing heavily. As a result, these countries understandably could incur colossal financial debts. It is no surprise that in the past decade, they were responsible for the flareup of the European debt crisis. Indeed, with each crisis, rather than seeking solutions to the problem, both the government and citizens of Greece simply threatened to pull out of the eurozone so that they can appreciate or depreciate their currency foreign exchange rate in order to improve exports and promote economic development. It is quite obvious that each time that happened, it pushed the eurozone to the edge of collapse.   

It is nearly impossible to just take one social system and adjust it to another country, especially when there are profound differences in culture. It is worth noting that when China began to carry through its enormous transitional process of "reform and opening-up," the nation could not simply take any foreign model as a guide, especially when China had only a vague but grand vision. With that as a constraint, China reached its current success by executing one small but bold step at a time. With this lesson in mind, the GBA, leveraging the power of the government to guide it based on China's conditions at the top level, may also want to devise a grand by experimenting with boldness, flexibility and gusto, one small step at a time.

From the examples of three bay areas, namely New York, San Francisco and Tokyo, it is quite transparent in their fledgling phases that responsible governments provided sufficient guidance, instead of allowing the market to grow freely. Only when the bay areas adequately matured did the government allow the free market system to reign.

We shall refer to the government's guidance in the fledgling phase of these bay areas as "affable guidance" and the market system later as "free rein nurturing."

To this end, the three local governments of GBA should also actively consider leveraging the power of administrative guidance to promote "zebras and not unicorns." The guidance is to ensure the GBA local governments can provide and strengthen legislation to prevent a malicious monopoly from raising its ugly head to stifle innovative enterprises and dismantle consumer rights and interests. With this guidance, there will be room for SMEs to survive and grow.

By establishing professional and mutual aid associations, the GBA local governments must proactively guide small and medium science and technology enterprises to learn from their stronger market-leading peers so they won't be blocked from entering the market. Last but not least, the government should allow large-scale leading enterprises to develop further, so that through natural competition, they can gain strength to eventually reach top international status.

In short, although one should study the vast experience and development of the New York Bay Area and the San Francisco Bay Area as important case studies, one should not forget that China has made great progress with its development in recent years. In this sense, it should be recognized that most Western countries of today are "emerging" countries. It is our firm believe that the GBA's three local governments, with wisdom, experience and creative modalities can guide the region to reach world-class status with profound and robust Chinese characteristics for China and humanity.