How Asean can grab the opportunities offered by the Greater Bay Area

In a global economic landscape battered by Covid-19, China’s Greater Bay Area development plan is a beacon of opportunity and growth for all of Asia.

The pandemic and growing regionalisation in recent years has added momentum to the trend of China-based manufacturers shifting production to Southeast Asia. Last year, the 10-member Association of Southeast Asian Nations surpassed the European Union to become China’s largest trading partner. China-Asean trade reached US$684.6 billion, up 6.7 per cent year on year.

The economies of the Greater Bay Area and Asean are complementary. The Greater Bay Area is a powerhouse when it comes to finance, manufacturing and innovation, but the region has relatively high labour costs and few raw materials. In contrast, most members of Asean have an abundance of labour, land and raw materials.

The benefits will flow both ways as the Greater Bay Area develops further. For a start, companies based in the Greater Bay Area will want to move their labour-intensive production elsewhere as costs rise, as well as find new markets.

We are already seeing China-based textiles, garments and electronics manufacturers build alternative production sites in the Asean region as they seek to lower costs while remaining close to China’s massive consumer market.