(Bloomberg) — There’s no turning back.
That’s the message Chinese President Xi Jinping was expected to send Wednesday in a speech marking the 40th anniversary of Shenzhen’s establishment as a special economic zone.
In his address, Xi was slated lay out a vision of how his Greater Bay Area will drive economic growth and bring Hong Kong more into lockstep with the mainland. That could mean bolder policies to knit together nine mainland cities — including Shenzhen, Hong Kong and Macau — aiming to create a regional powerhouse rivaling Tokyo Bay or Silicon Valley.
The speech was part of an event scheduled to start at 10:30 a.m. at the Qianhai International Conference Center in Shenzhen, state broadcaster China Central Television said Wednesday.
During a sweep through manufacturing hub Guangdong province this week, the Chinese leader gave an inkling of what’s to come. He urged a greater focus on quality to overcome increased global uncertainty, and made a pitch for “self-reliance” during a visit to a local technology company, according to the official Xinhua News Agency.
Xi’s trip through the Pearl River Delta, which has an annual economic output larger than Indonesia, “is a huge signal that he wants to follow up on opening-up,” said Wang Huiyao, an adviser to China’s cabinet and founder of the Center for China and Globalization in Beijing. “It’s a symbol of more openness. I’m expecting him to talk about the Greater Bay Area, policy incentives as well as how Hong Kong and China can collaborate.”
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Shenzhen could be the center of this new universe, said Hao Hong, chief strategist for Bocom International in Hong Kong. The once-sleepy fishing village that’s now home to Huawei Technologies Co. and Tencent Holdings Ltd. could be given more autonomy and become the financing center for technology innovation.
Xi is scheduled to meet the leaders of Hong Kong and Macau in Shenzhen, as he seeks to leverage the former colonies’ separate trade and legal systems to help make the broader region more competitive.
Just like it was four decades ago, the city will again be a testbed for reform — this time in land, human capital and capital markets, including the launch of a digital yuan. That’s why investors sent the Hong Kong and Chinese stock markets rallying earlier this week when Xi’s speech was announced, according to Hao.
“It’s a comprehensive reform aiming at elevating the city to the center of the Greater Bay Area,” he said. “The market is liking what it sees and is excited by this news.”
Also helping to fuel inflows into Chinese assets are signs of a continued recovery in the world’s second-largest economy as the pandemic abates. China’s exports rose for the fourth straight month in September, while the nation’s stock market topped $10 trillion for the first time since 2015 on Tuesday.
Still, Xi’s visit also comes at a demanding time for China. The ongoing trade war with the U.S. and pandemic-driven economic downturn have increased the urgency of Beijing’s efforts to boost local consumption and close the technology gap in strategic industries. In recent months, Xi has urged a shift to a “dual-circulation” economy fueled by domestic growth and supplemented by foreign technology and investment.
“Currently, we are experiencing changes unseen in a century, and we need to set ourselves on a path to higher quality self-reliance,” Xi said during a visit to Shenzhen-listed Chaozhou Three-Circle Group Co. in Guangdong on Monday, according to Xinhua — an oft-used allusion to U.S. President Donald Trump’s “America First” policies.
“Self-dependent innovation is key for enterprises’ growth, industry upgrading and high-quality economic development,” Xi said.
(Updates with event details in fourth paragraph.)
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