Investing in China's Greater Bay Area: Tapping into Long-Term Opportunities

InvestinginChina’sGreaterBayArea:TappingintoLong-TermOpportunities DoingBusinessinChina2023Series VISITUSONFACEBOOK <DezanShira&Associates> <ChinaBriefing> VISITUSONLINKEDIN <DezanShira&Associates> <ChinaBriefing> FOLLOWUSONTWITTER @DezanShira@ChinaBriefing THEDOINGBUSINESSINASIAGUIDESSERIES AvailabletoDownloadNow: DoingBusinessinChinaPortal-LAUNCHEDNOW! •ASEANGuide •ChinaGuide •IndiaGuide •IndonesiaGuide •HongKongGuide •SingaporeGuide •VietnamGuide •ChinaSuperCityClusters(Upcoming) •DubaiGuide(Upcoming) OurlatestonlineDoingBusinessinChinaPortalconsists of100+guides,videos,publications,andtoolsthatarepracticalandeasytonavigate,covering:WhyChina,RegionstoInvest,SectorInsights,HowtoSetup,Tax,AuditandAccounting,HR,Recruitment,PEO,andPayroll,News,Events,andmore. ThisInvestinginChina’sGreaterBayArea:TappingintoLong-TermOpportunitiesguidewasproducedbyateamofprofessionalsatDezanShira&Associates,withArendseHuldandZhouQian astechnicaleditors,andGuilhermeCamposascontributor. CreativedesignoftheguidewasprovidedbyNguyenHoangLinhandAparajitaZadoo. Disclaimer Thecontentsofthisguideareforgeneralinformationonly.Foradviceonyourspecificbusiness,pleasecontactaqualifiedprofessionaladvisor.Copyright2023,AsiaBriefingLtd.Noreproduction,copyingortranslationofmaterialswithoutpriorpermissionofthepublisherispermitted. AboutDezanShira&Associates DezanShira&Associatesisapan-Asia,multi-disciplinaryprofessionalservicesfirm,providinglegal,taxandoperationaladvisorytointernationalcorporateinvestors.OperationalthroughoutChina,IndiaandASEAN,ourmissionistoguideforeigncompaniesthroughAsia’scomplexregulatoryenvironmentandassistthemwithallaspectsofestablishing,maintainingandgrowingtheirbusinessoperationsintheregion.Withmorethantwodecadesofon-the-groundexperienceandalargeteamoflawyers,taxexperts,andauditors,inadditiontoresearchersandbusinessanalysts,weareyourpartnerforgrowthinAsia. Preface TheGreaterBayArea(GBA)initiativeisanambitiousplantointegrateandtransformninemainlandcitiesinthePearlRiverDeltaandtwospecialadministrativeregions–HongKongandMacao–intoaninternationalbayareathatwillrivalothersuchworld-classcityclustersliketheNewYork,SanFrancisco,andTokyobayareas. SincetheformulationoftheGBAinitiativein2017,businesscommunitieshaveplacedhighexpectationonthecoordinateddevelopmentamongGBAcities,astheremovalofbarriersthatlimitthemovementoftrade,capital,information,andpeople–coupledwithtargetedgovernmentpolicies–willallowvariousindustriestoflourish. Givenitsdynamicandcomprehensiveindustrylandscape,itslargeandwealthylocalconsumerbase,aswellitsabilitytoattracthighlyskilledtalents,theGBAisoneofChina’smostinvestor-friendlyareaswithalonghistoryofforeignengagement. Nevertheless,withChina’seconomybeingaffectedbysomedownwardpressure,includinguncertaintiescausedbymountinggeopoliticaltensions,comparativelyweekconsumptiontrends,andthesluggishrealestatesector,businessesthattailortheirstrategytotheGBA’sprioritiesandhaveabetterunderstandingoftheregionwillbebestplacedtobenefitfromitsambitiousagenda. DesignedtointroducethefundamentalsofinvestingintheGBA,thispublicationiscompiledbyexpertsatDezanShira&Associates,aspecialistforeigndirectinvestmentfirmprovidingcorporateestablishmentservices,businessadvisory,taxadvisoryandcompliance,accounting,payroll,duediligence,andfinancialreviewservicestomultinationalsinvestinginemergingAsia.WehopethispublicationcanhelpforeigninvestorsstaynimbleintheGBAregionamidanotherwisechallengingtime. ALBERTOVETTORETTI ManagingPartnerDezanShira&Associates CONTACT DezanShira&Associateschina@dezshira.comwww.dezshira.com TableofContents Preface04 Part1|AnOverviewofChina’sGBA06 Part2|11MemberCitiesoftheGBA09 Part3|LeadingIndustriesoftheGBA19 Part4|TaxIncentivesandGovernmentSubsidiesin22 theGBA Part5|GBAvs.HainanFTP27 Part6|FutureDevelopmentoftheGBA31 Part7|Conclusion35 INVESTINGINCHINA’SGREATERBAYAREA:TAPPINGINTOLONG-TERMOPPORTUNITIES5 1 AnOverviewofChina’sGBA 9citiesofGuangdong Macao GreaterBayArea HongKong TheGuangdong-Macao-HongKongGreaterBayArea(GBA)isamega-cityclusterlocatedinthePearlRiverDeltacomprisedofninecitiesinthesouthofGuangdongprovinceandthespecialadministrativeregionsofHongKongandMacao.ThenineGuangdongcitiesincludesomeofthelargestandeconomicallyactivecitiesontheChinesemainland,suchasthemanufacturingandtechnologypowerhousesofGuangzhouandShenzhen. TheGBAisoneofChina’slargestandwealthiestcityclusters,secondonlytotheYangtzeRiverDeltaregionineasternChina.ItscombinedeconomyhasgrownbyRMB2.4trillion(US$372billion)inthefiveyearssincethesigningoftheGBAFramework,reachingRMB 12.6trillion(US$1.95trillion)in2021.Thatputstheregion’sGDProughlyonparwiththatofCanadaandaccountedfor11percentofChina’stotalGDPin2021,despiteonlyoccupying 0.6percentoftotallandarea.TheGBAalsohasthehighestGDPpercapitaofanyregioninChina,reachingUS$22,585in2021. TheareahasbeenacoredriverofChina’sexplosivegrowthsincetheeconomicreformofthe1980sand90s.ThemetropolisesofGuangzhouandShenzhen,inparticular,havebeenatthecenterofChina’smanufacturingandinnovation