China’s proposed Greater Bay Area (GBA)—Hong Kong, Macau, and nine cities in southern Guangdong Province—represents a “golden moment” for innovation provided political and regulatory hurdles can be overcome, a senior official of Hong Kong-government backed Cyberport said Tuesday.
Speaking on the sidelines of TechCrunch Shenzhen 2018, Toa Charm, chief public mission officer for the innovation and digital tech hub, said closer collaboration is needed in order to realize the full potential the GBA represents for sectors such as fintech.
“Commercially and politically [GBA] makes sense,” he said. “Now it’s about implementation.”
Chief among the challenges are regulatory issues. Since GBA is made up of many different jurisdictions, the question was how to ensure necessary regulation could be implemented smoothly.
On the Hong Kong side, Charm said, chief banking regulator Hong Kong Monetary Authority is doing a “good job,” and many innovations are being introduced in the territory. He cited the recently launched Faster Payment System (FPS) and stored value products such as e-wallets as examples. (FPS subsequently has experienced some setbacks.)
The challenge is how to make these and other innovations easy to use and comply with regulations across the entire GBA. “That’s something we need to work out,” said Charm.
For regulatory issues in GBA, the Shenzhen government is “key,” he said, adding that the governments of Hong Kong and Shenzhen had been working together for years, “with some success and some failure.”
With GBA, there is now a much bigger incentive to collaborate. Success also will depend on other local governments in the region and, crucially, a strong show of support from the central government in Beijing.
While there are still areas of conflict, including cultural and mindset, Hong Kong and Shenzhen are not competing with each other. “We need to make it work so that we can be competitive globally,” he said. “… It’s a global war, it’s not a city war.”
Charm said regulatory expertise gained in Hong Kong could be applied in the GBA or even to other cities in mainland China.
Citing crypto exchanges—illegal in mainland China—as an example, Charm proposed setting up pilot studies in Hong Kong to devise regulations that could address concerns surrounding exchanges.
“We can make use of the pilot results to make it work in Hong Kong and push it back to China,” he said. “If we can prove it, then we can make ICO happen again [in the mainland],” said Charm.
Still, Hong Kong itself has its own set of obstacles standing in the way of GBA’s success. Charm pointed to what he called Hong Kong’s “political dilemma” where some residents are wary of initiatives, including technological ones, that involve closer integration with the mainland. “It’s a tough sell,” he said.
Yet tech may hold the key if it can enhance people’s lives, Charm said, pointing to wider acceptance of Chinese technology by consumers in Hong Kong.
The task is: “How can we use our wisdom and how we can show or educate the value, the benefits they [Hong Kong residents] can get from these, overshadow those political sensitivities,” said Charm. “This is not easy,” he added.