Trade war puts dent in Beijing’s plan to turn Hong Kong and surrounding cities into new Silicon Valley

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Trade war puts dent in Beijing’s plan to turn Hong Kong and surrounding cities into new Silicon Valley

The US-China trade war has complicated Beijing’s ambitious plan to transform 11 cities in the “Greater Bay Area” into the Chinese version of the “Silicon Valley”, the Post has learned.

A source with knowledge of the matter said the announcement was delayed so as to avoid being further targeted by the United States, taking lessons from its “Made in China 2025” plan, which Washington treats as an all-out challenge.

Details of the proposed Greater Bay Area, a master plan to integrate Hong Kong, Macau and nine cities in Guangdong into an innovation powerhouse, were expected to be released early this year.

During the national parliamentary meetings in March, Chinese Premier Li Keqiang said the plan would be rolled out “very soon”. However, the release has yet to be confirmed nearly five months later.

“The trade war is a key factor,” a source close to Beijing said. “Look at how the rosy projection of the 2025 plan is being targeted by the US.”

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The source was referring to the “Made in China 2025” plan first announced in 2015, which is an industrial upgrading strategy that aims to shift China’s economy into higher value-added manufacturing sectors.

US President Donald Trump’s proposed tariffs on Chinese products has taken aim at many of the industries highlighted in the plan.

Watch: Hong Kong lawmakers quizzed on Greater Bay Area

“Tuning down the scale of the plan may attract ridicule, but painting a future too bright may give fuel to the US,” said the source, highlighting the conflict Beijing faced.

The solution was to roll out the policy measures one by one whenever they were ready, but not the whole plan at one time, he said, citing the examples of the announced measures that allowed Hong Kong scientists to secure funding from the mainland, and waiving the permit requirement for Hongkongers working across the border.

Another source close to the government told the Post that some clues could be drawn from Chief Executive Carrie Lam Cheng Yuet-ngor’s remarks after meeting Vice-Premier Han Zheng in June.

At that time, Hong Kong’s leader said the planning work was a continuous process and they were not waiting for a plan, as many things were actually already in progress.

One of the people who had long awaited the plan is Jonathan Koon-shum Choi, the chairman of the Chinese General Chamber of Commerce.

He was supposed to hold a forum discussing opportunities for the Greater Bay Area in May, with Lam and mainland officials attending as guests. The date of the forum has been changed several times, to make it occur after the announcement of the plan.

“I do not dare to say when the plan would be rolled out now,” Choi, also a standing committee member of the Beijing top advisory body, said on Wednesday, announcing that the forum would take place on August 23, without any further delays.

China holds off on Greater Bay Area master plan as trade turmoil clouds outlook

Choi said he did not want to speculate on the reasons for the delay, but agreed it was probably something to do with the trade war.

“The announcement of concrete policies is more important,” he said.

Lam, alongside with officials from the Beijing’s liaison office and ministry of commerce, would attend the summit which was focus on opportunities in the Greater Bay Area, and Belt and Road.

Additional reporting by He Huifeng

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