Understanding China’s Greater Bay Area: Opportunities for Italian Companies

UNDERSTANDINGCHINA’SGREATERBAYAREA:OPPORTUNITIESFORITALIANCOMPANIES Producedinassociationwith TableofContents 04Preface 05AnOverviewofChina’sGBA 0711MemberCitiesoftheGBA 15LeadingIndustriesoftheGBA 16 TaxIncentivesandGovern-mentSubsidiesintheGBA 20GBAvs.HainanFTP 23FutureDevelopmentoftheGBA 26ItalianCompaniesintheGBA 29Conclusion 31 30AboutDezanShira&AssociatesAbouttheChina-Italy ChamberofCommerce Disclaimer: ThisUnderstandingChina’sGreaterBayArea:OpportunitiesforItalianCompaniesreportwasproducedbyateamofprofessionalsatDezanShira&Associates,withArendseHuldandZhouQianastechnicaleditors,andGuilhermeCamposascontributor.CreativedesignoftheguidewasprovidedbyHaNgocAnhThuandNguyenHoangLinh. Thecontentsofthisreportareforgeneralinformationonly.Foradviceonyourspecificbusiness,pleasecontactaqualifiedprofessionaladvisor.Noreproduction,copying,ortranslationofmaterialswithoutpriorpermissionofthepublisherispermitted. Publishedby©DezanShira&AssociatesLtd. TheGreaterBayArea(GBA)initiativeisanambitiousplantointegrateandtransformninemainlandcitiesinthePearlRiverDeltaandtwospecialadministrativeregions–HongKongandMacao–intoaninternationalbayareathatwillrivalothersuchworld-classcityclustersliketheNewYork,SanFrancisco,andTokyobayareas. SincetheformulationoftheGBAinitiativein2017,businesscommunitieshaveplacedhighexpectationonthecoordinateddevelopmentamongGBAcities,astheremovalofbarriersthatlimitthemovementoftrade,capital,information,andpeople–coupledwithtargetedgovernmentpolicies–willallowvariousindustriestoflourish. Givenitsdynamicandcomprehensiveindustrylandscape,itslargeandwealthylocalconsumerbase,aswellitsabilitytoattracthighlyskilledtalents,theGBAisoneofChina’smostinvestor-friendlyareaswithalonghistoryofforeignengagement. TheItalianbusinesscommunitypossessesstrongadvantagesinthefoodandbeverage(F&B),hospitality,machineryandautomotive,electronics,fashionindustries,whichareamongkeyareaspromotedfortheGBA’ssuccess. Nevertheless,withChina’seconomybeingaffectedbysomedownwardpressure,includinguncertaintiescausedbytheCOVID-19outbreaks,comparativelyweakconsumptiontrends,andthesluggishrealestatesector,businessesthattailortheirstrategytotheGBA’sprioritiesandhaveabetterunderstandingoftheregionwillbebestplacedtobenefitfromitsambitiousagenda. IwishheretothanktheChina-ItalyChamberofCommerce(CICC)anditsChairman,PaoloBazzoni,fortheircontributionintheproductionoftheUnderstandingChina’sGreaterBayArea:OpportunitiesforItalianCompaniesreport.WehopethispublicationcanhelpItalianbusinessesstaynimbleintheGBAamidanotherwisechallengingtime. ALBERTOVETTORETTI ManagingPartnerDezanShira&Associates 9citiesofGuangdong Macao GreaterBayArea HongKong TheGuangdong-Macao-HongKongGreaterBayArea(GBA)isamega-cityclusterlocatedinthePearlRiverDeltacomprisedofninecitiesinthesouthofGuangdongprovinceandthespecialadministrativeregionsofHongKongandMacao.ThenineGuangdongcitiesincludesomeofthelargestandeconomicallyactivecitiesontheChinesemainland,suchasthemanufacturingandtechnologypowerhousesofGuangzhouandShenzhen. TheGBAisoneofChina’slargestandwealthiestcityclusters,secondonlytotheYangtzeRiverDeltaregionineasternChina.ItscombinedeconomyhasgrownbyRMB2.4trillion(US$372billion)inthefiveyearssincethesigningoftheGBAFramework,reachingRMB12.6trillion(US$1.95trillion)in2021.Thatputstheregion’sGDProughlyonparwiththatofCanadaandaccountedfor11percentofChina’stotalGDPin2021,despiteonlyoccupying0.6percentoftotallandarea.TheGBAalsohasthehighestGDPpercapitaofanyregioninChina,reachingUS$22,585in2021. TheareahasbeenacoredriverofChina’sexplosivegrowthsincetheeconomicreformofthe1980sand90s.ThemetropolisesofGuangzhouandShenzhen,inparticular,havebeenatthecenterofChina’smanufacturingandinnovationpowerfordecades,fosteringsomeofthebiggestnamesintechnology,realestate,manufacturing,andmore.ThePortofShenzhenisthethirdbusiestinChinaandfourthbusiestintheworld,handlingaround278.4millionmetrictonsofcargoin2021. AnOverviewofChina’sGBA Inadditiontotheregion’sflagshipmetropolises,thesmallercitiespresentamyriadofnewopportunitiesforforeignbusinessesandinvestors.Deeperintegrationoftheareathroughgovernmentpolicies,improvedtransportinfrastructure,andspecializedcapabilitiesandresourcesofthevariousareasaremakingthesewell-connectedthird-tiercitiesincreasinglyattractivetoforeigninvestors. TheGBAisalsooneofthewealthiestregionsinthecountryandboastsahighstandardofliving,largeconsumerbase,andhighlyskilledworkforce,makingitscitiesanattractivebaseforforeignbusinessesandtheirstaff. GreaterBayAreaProfile Totalarea:56,098km2 Totalpopulation:86.7million TotalGDP:RMB12.6trillion(US$1.95trillion)Totalutilizedforeigncapital:US$153.74billionTotalimport-export:US$3.5trillion Foshan Zhaoqing Guangzhou Huizhou Dongguan GDP US$188.4B GDPUS$41B POP4.13M GDPUS$437.6B POP18.81M GDPUS$77.1B POP6.07M GDPUS$168.2B POP10.5M POP9.6M EXIMUS$6.3B EXIMUS$167.8B EXIMUS$47.4B EXIMUS$236.3B EXIMUS$95.5B FDIUS$0.126B FDIUS$8.4B FDIUS$1.15B FDIUS$1.5B FDIUS$0.52B GDP Zhongshan US$55.2B Shenzhen POP 4.47M GDP US$475.3B EXIMUS$41.7