The Integration of the Pearl River Delta: The Hong Kong-Zhuhai-Macau Bridge

August 22, 2018September 25, 2018 Zoltai Alexandra 12909 Views 0 Comments China, Hong Kong, HZMB, infrastructure, Macau, Shenzhen, urbanization

Being one of China’s economic engines, the city agglomeration of the Pearl River Delta is considered by many people the largest megacity in the world by many people. Over the past decades, it has experienced an extraordinary economic growth and has become one of the key trading and industrial centers globally, and these tendencies are expected to continue in the future, too. According to the experts, international experience shows that one of the keys to the proper exploitation of economic opportunities can be closer cooperation among the cities and integration[i]^,[ii]. In this respect, considerable and progressive ambitions are taking shape, and the newest clear result will be the construction of the Hong Kong-Zhuhai-Macau Bridge.

The Pearl River Delta

In the late 1970s the reform and opening policy announced by Deng Xiaoping had considerably enhanced development and economic growth in China. This is the only country that has managed to maintain the two-digit annual growth over the past 30 years.[iii] Economic development, however, has not been unitary in the country; the first territories growing rapidly as a result of the reforms were the Special Economic Zones (SEZ). The first four cities were founded in the 1980s, three of them are situated in Guangdong Province, and two are in the Pearl River Delta: Shenzhen and Zhuhai.[iv]

Guangdong Province in terms of numbers:

a population of over 100 million people
most people speak the Cantonel language, which is also used in Hong Kong
it constitutes 11% of China’s GDP (with this figure, this Chinese province had had the highest economic performance for 26 years in 2016)
26% of China’s trade is realized here and it serves as China’s largest export base
Shenzhen and Hong Kong have the third and fifth busiest harbors in the world, respectively
at global level, the Shenzen Stock Exchange ranks fifth; however, if we add it to the Hongkongese one, they take third place
by 2025, the Pearl River Delta and Hong Kong together will have become the largest urban bank cluster in the world, and their revenue generation potential will comprise USD 185 billion.

Source: HSBC – Pearl River Delta: Factbook, World Shipping Council[v]

Economic role

The Pearl River Delta is the southernmost of China’s three main coastal economic centers. The northernmost one is the Beijing-Tianjin-Bohai axis, which has ten cities as members, a total population of 100 million people and a GDP of USD 1,300 billion, while in the middle is the agglomeration of the Yangtze River Delta, led by Shanghai, having 130 million people and producing a GDP of 2,000 billion dollars annually. Over one-fifth (21%) of the Chinese population lives in these 3 clusters, and 40% of the GDP is produced here.[vi]

For more than 30 years that elapsed since the opening, the Pearl River Delta as a “pilot area” has taken a leading role in the realization of the market-oriented reforms, has soon elaborated the framework of the Socialist market economy, and consequently, it has become the most significant trading region throughout China with the most complex market system of the country. Thanks to its geographical location, too, the Pearl River Delta is the most export-driven region with the highest export proportion. The backward agricultural region has become a manufacturing industrial center on a global scale and is currently the key engine of China’s social and economic development.[vii] Its GDP totals over USD 1,200 billion, which is higher than that of Indonesia, and its GDP growth has been 12% over the past decade[viii]. The 2020 Medium Term Development Review drafted for the region in 2008 outlines a vision of further development opportunities for the city agglomeration: there is still considerable potential in the advancement of industrialization, IT systems, urbanization, commercialization and internationalization. As a result, the explosive growth arising from the economic integration of Guangdong Province, Hong Kong and Macau (also modelled by the bridge under construction), and especially the development of the past decades gives considerable competitive advantages to the region at the regional market.[ix]

The competitive growth areas of the region at national level[x]:

Manufacturing industry: a highly competitive light industry and technology-based manufacturing industry; the assembly plants and the leading sites of high-tech electronic products can be found here.
Transportation: one of the largest markets of maritime and air transport at global level, primarily due to its leading industrial and exporting role.
Commercial services: the Greater Pearl River Delta Region (this definition officially includes Hong Kong and Macau, too) is one of the largest trading service centers of Mainland China: trading, procurement, freight forwarding, logistics, etc. are concentrated in this field; it is a rather attractive region for the purchasing and procurement offices of transnational companies.
Digital innovation: in this respect, we must mention the city of Shenzhen, China’s Silicon Valley or the Silicon Delta”[xi]: it aims to become a global innovation hub, having every chance of success. For instance, by far the most patent applications are submitted from here in China. It is the center for large companies such as Tencent, Huawei, OnePlus, BYD, TP-Link or ZTE.

Although the industry and the settlement of assembly plants have played an important role in the rise of the region (primarily due to the considerable amount of cheap labor force), by today the third economic sector, i.e. the service sector has provided the greatest part of the GDP, and as for the growth pace, the tertiary sector takes the lead even more definitely (Diagram 1). The analysts point out that, besides the above-mentioned integration, the most significant factors of further growth are diversification and innovation[xii].

Figure 1: The Pearl River Delta’s GDP distribution between 1978-2013. Source: National Bureau of Statistics PRC, HSBC Pearl River Delta: Factbook. April 2016.

Urbanization processes

In China the economic development has launched the process of urbanization, too: 190 million people (19.4%) lived in cities in 1980, and 636 million (47.0%) in 2010. The estimations suggest that this number will reach 1,038 million by 2050, which constitutes 73.2% of the population.[xiii] China’s urbanization was reflected in both the rapid growth of urban population and the emergence of cities of central importance. One of the most rapid urbanizations in history took place in the territory of the Pearl River Delta: the territory, which used to be an agricultural area in 1979, has become one of the centers of global trade by today.[xiv] In 2008 China announced its intention to turn the cities of Guangzhou, Shenzhen, Dongguan, Zhaoqing, Foshan, Huizhou, Jiangmen, Zhongshan and Zhuhai into a big megacity around the Pearl River Delta, and significant infrastructure projects were launched for this purpose all around the city.[xv] According to the study examining the Eastern Asian urbanization processes between 2000 and 2010,[xvi] if the city agglomeration of the Pearl River Delta is considered one settlement (as the Chinese intent suggests), today it is the largest urban agglomeration in the world, taking the leading role from the Tokyo agglomeration, which had been Top1 for a long time. When typifying the megacities, the study classifies the two city regions in the same category, legitimating the change in order in this way, too. (At the same time, it is worth mentioning that the World Urbanization Prospects, the UN report on urbanization trends, still deems the Tokyo agglomeration as the largest one) It is referred to as a fragmented urban area, which has no dominant central settlement in the agglomeration but can be characterized as a widespread city region, where none of the cities has a territory reaching 50% of the total area. Besides the Pearl River Delta, such typical multi-centered city regions include the Manila agglomeration at the Philippines (consisting of 85 municipalities) and the Tokyo agglomeration (with 240 municipalities from seven prefectures).[xvii] The study prepared by UN-HABITAT on global urbanization in 2016 pays close attention to the so-called megaregions: to such regions evolving through the close cooperation of cities that offer unique opportunities of economic welfare and development through their intensive employment and knowledge-share networks and play a more and more significant role across the borders. For instance, we can mention the Pearl River Delta in São Paulo Brazil, Rio de Janeiro city pair, and the Mumbai–Delhi industrial corridor in India.[xviii]

Figure 2: Population change of the main Pearl River Delta cities from 1980 to 2015. Data source: population.city

Figure 3: Density of population and infrastructure of the Pearl River Delta based on the data available in March 2017. Source: The Economist

The reforms have resulted in considerable development in China, mainly on the coastal parts though the inflow of foreign capital, which goes with the urbanization of the regions. China’s Open Door Policy has made one of the greatest influences on the Pearl River Delta, as both the population and the territory of the local cities have increased considerably. The plan of the megacity is expected to bring further growth. A remarkable change can be predicted at the western part of the Delta, where the Hong Kong-Zhuhai-Macau Bridge currently under construction will play a significant role. The bridge, which has been planned since the 1990s but still has not been constructed, is now going to be built and may boost up the economy of the cities there.

Project Overview

The Central Bridge (The Hong kong-Zhuhai-Macau Bridge/HZMB)

The purpose of the bridge is to connect the Hong Kong Special Administrative Region with Zhuhai in Guangdong Province, Mainland China and Macau Special Administrative Region. It primarily aims to ensure the flow of the travelers and commodities between Hong Kong, Mainland China and Macau by establishing a mainland transport link between the eastern and western banks of the Pearl River. The building of the bridge would make the economic connection of the three sites even closer and would contribute to the sustainable development of the territory.[xix]

The Hong Kong Link Road

This link road would be the connection point between the central bridge and the planned Hong Kong Border Crossing Facility. The 12-kilometer long and 6-laned road section will spread between the Hongkongese border of the central bridge and the border crossing to be built in the northeastern part of the Hongkongese airport island. The project will include the construction of tunnels, dikes, transport hubs and other facilities, too.[xx]

Figure 4: Master Plan of the HZMB project-related Facilities. Source: http://www.hzmb.hk/eng/index.html

The Hong Kong border crossing facility

Serving also as a transport hub, this facility mainly aims at the customs clearing of goods and the passing of travelers by using the new bridge. To secure the site, a 150-hectare artificial island is built, which includes the border crossing of 130 hectares and the 20-hectare promontory of Tuen Mun – Chek Lap Kok link road, supplementing the northeastern part of Hong Kong International Airport. Thanks to its geographical location, it will become a convenient transport hub (airport, ferry, subway) in direct vicinity on the international airport and near the city lying in Tung Chung New Territories. The establishment of this hub will promote such cooperation that will promote the development of the current Hongkongese economy.[xxi]

The Tuen Mun – Chek Lap Kok link road

This link road provides a strategic connection with the northwestern part of the New Territories, the Hong Kong-Zhuhai-Macau Bridge, the Hongkongese Border Cross Facility, North Lantau and Hong Kong International Airport. The new link road is planned to be 9 kilometers long and divided into a northern and a southern part. The southern link road will provide the connection between North Lantau Highway (Tai Ho) and the Border Crossing Facility (the northeastern part of Hong Kong International Airport). The northern link road connects Tuen Mun in the New Territories with the border crossing facility. The link road reduces the temporal distance from 30 minutes to only 10 minutes between the New Territories and Lantau Island. Also, the road to be constructed will not only ensure smoother traffic but also offer an alternative route to the Hong Kong Airport.[xxii] Tuen Mun western bypass, which is also under construction, will grant a direct access to the northwestern part of the New Territories, between the Hong Kong-Zhuhai-Macau Bridge, Hong Kong International Airport and North Lantau.[xxiii]

Upon the completion of the project, Hong Kong will get even closer to the western part of the Pearl River Delta, which offers easier access to the main industrial and trading cities in Mainland China. Also, the bridge being built will exert a positive effect on foreign investments in the western Pearl River Delta, strengthening the role of Hong Kong as a tourism and trading center.[xxiv]

The development of the investment

The idea of the grandiose project was conceived by Gordon Wu magnate as early as in 1983. At that time the concept included no tunnel but bridges that would have connected the New Territories with the city of Zhuhai. During this period the Chinese city was in its early developmental stage, being one of the first cities to receive the Special Economic Zone (SEZ) status from China in the 1980s, which made the city more attractive to foreign investments. Mainly for this reason, Zhuhai would have needed a faster and more efficient transport connection with Hong Kong; therefore, the concept of the bridge was also supported by the Mainland Chinese authorities. In 1993 the plans of the construction between Zhuhai and Tuen Mun were announced. In 1994 the China-UK Infrastructure Supervisory Board was set up to investigate the feasibility of the concept. After Hong Kong’s return to China in 1997, however, the concept of the bridge was neglected, and the establishment of an international airport was proposed on Lantau Island in Hong Kong, which would connect the three cities by air, and finally this idea was implemented. After a couple of years, in 2003 a group was set up by Guangdong, Hong Kong and Macau jointly to thoroughly investigate the implementation of a bridge overarching the Pearl River Delta. Following five years of research and study, in 2008 the three parties successfully elaborated the concept of the bridge and its implementation plan.[xxv]

History of development after 2003:

2003: Finally, the Hongkongese Government admitted the need for a mainland connection between Hong Kong and the western delta of the Pearl River, so they set up the Hong Kong-Zhuhai-Macau Bridge workgroup consisting of 9 specialists, 3-3 for each city, and they also agreed to jointly bear the costs of the preliminary works.[xxvi]
February 2008: The Governments of Hong Kong, Macau and Guangdong agreed on how to share the costs arising from the investment: Hong Kong – 50.2%; Guangdong – 35.1%; Macau – 14.7%. In addition, they also entered into an agreement that each Government shall take responsibility for the border crossing facilities and link roads belonging to them[xxvii]
August 2008: A new cost-sharing agreement was concluded, according to which Guangdong Province assumed RMB 7 billion, Hong Kong RMB 6.75 billion and Macau RMB 1.98 with the help of Beijing. As a result, the percentage shares changed: Hong Kong – 42.9%; Guangdong and the Chinese Central Government. – 44.5%, Macau – 12.6%. The reason for the modification was that thus Guangdong, that is Beijing could have a control over the joint venture due to the share, which had been set up by the three Governments for the management of tenders related to the works of the bridge.[xxviii] In this way China fulfils the leading supervisory role and can pass decisions in the significant issues through Guangdong.
2009: The Bank of China was selected to be the creditor of the loan offered for the works of the central bridge. The Hongkong Environmental Protection Authority permitted the bridge project in the Hongkongese part, while the works were launched on the waters of Mainland China.[xxix]
2010: A Tung Chung resident (Hong Kong/New Territories) applied for judicial review regarding the approval of the environmental impact evaluation performed by the Government of Hongkong regarding the construction of the Hong Kong Border Crossing Facility and the Hong Kong Link Road, on the ground s that the Government ignored the issues of environmental pollution and applied a wrong methodology.[xxx]
April 2011: the Hong Kong Court of First Instance annulled the environmental licenses; therefore, the construction works could not be started.
September 2011: The Supreme Court permitted the appeal of the Government, the environmental licenses remained valid, and the works began again. In the meantime, the construction of the artificial island to serve as the site of Hongkongese Border Crossing Facility was started.[xxxi]
2012: The works of the Hong Kong Link Road were started.[xxxii]
2013: The building of the Tuen Mun – Chek Lap Kok Link Road was started..[xxxiii]
2014: The Hongkongese Government announced that an additional amount of 5 billion Hongkongese dollars were needed for the completion of the border crossing facility on the artificial island owing to the workers’ increasing wages, the material costs and the technology applied.[xxxiv]
January 2015: The Hongkongese Secretary of Transport Affairs announced that the border crossing facility and the relevant works would not be finished by 2016.[xxxv]
March 2015: According to a Guandong official, the completion of the bridge in 2020 would also be a difficult purpose, while the costs had exceeded the amount of 132.9 billion Hongkongese dollars.[xxxvi]
September 2015: The report of the Hongkongese Motorway Management Authority states that the artificial island to be constructed should be elevated 7 meters higher owing to the manufacturing technology applied in Hong Kong for the first time.[xxxvii]
2017: The abutment of the Hong Kong-Zhuhai-Macau Bridge was completed.[xxxviii]

Expectable results

The completion of the project will have plenty of tangible results and long-term indirect effects. The homepage of the project highlights the integration of Hong Kong with the cities situated in the Pearl river Delta. The cities lying in the western part of the Delta will be accessible from Hong Kong in one hour and a half. Let us take two examples: from the city of Zhuhai, located on the western coast, we need to travel 200 km to reach Kwai Tsing Container Terminal of Hong Kong, which takes three hours and a half. Similarly, the 200 km long journey from Zhuahai to the international airport of Hong Kong takes four hours. These distances decrease to 65 km (75 minutes) in case of the terminal and 40 km (45 minutes) in case of the airport, which means that the distance between the two cities decreases by more than 60 and 80%, respectively. Besides, the bridge enhances the further economic growth of Hong Kong, Macau and the western cities of the Pearl River Delta, increases the attraction of the region for foreign investments which facilitates the development of the whole sectoral structure. This kind of economic “background field” is also expected to encourage Hongkongese businesspeople to extend their activities in the territory of Mainland China. The growth forecast in the different sectors of the economy, from the project, the financial and trading sectors to tourism, consolidate the trading and logistics hub role of Hong Kong because its container port and airport will be more accessible from the mainland territories.[xxxix]

Figure 5: Time savings to be achieved by the realization of the Hong Kong-Zhuhai-Macau Bridge. Source: http://www.hzmb.hk/eng/index.html

Summary

The construction of the Hong Kong-Zhuhai-Macau Bridge will be a new step in the integration of the cities situated in the Pearl River Delta. The city agglomeration has experienced rather dynamic development over the past few decades, and further growth requires closer cooperation. One of the key cornerstones of this approach will be the inauguration of the bridge, which will imply both direct benefits (improvement of transport access between the cities) and considerable economic opportunities. Also, the successful work share and effective cooperation between the cities can serve as an important international model for other regions in the future.

Authors: László Gere – Alexandra Zoltai

[i] XIANGMING, Ma: The integration of the city-region of the Pearl River Delta. In: Asia Paciﬁc Viewpoint, Vol. 53, No. 1, April 2012. pp. 97–104.

[ii] ’ The importance of better internal communications’. The Economist, Apr 6th 2017. https://www.economist.com/news/special-report/21720075-heavy-spending-infrastructure-helping-integrate-region-importance

[iii] Oizumi, Keiichiro: The Emergence of the Pearl River Delta Economic Zone. In: Pacific Business and Industries Vol. XI, 2011 No. 41. p. 3.

[iv] HSBC: Pearl River Delta: Factbook. April 2016.

[v] World Shipping Council: Top 50 World Container Ports. http://www.worldshipping.org/about-the-industry/global-trade/top-50-world-container-ports

[vi] FULLER, Ed: China’s Crown Jewel: The Pearl River Delta. Forbes, Oct 2 2017. https://www.forbes.com/sites/edfuller/2017/10/02/chinas-crown-jewel-the-pearl-river-delta/#1b2bbbf85047

[vii] The National Development and Reform Commission: The Outline of the Plan for the Reform and Development of the Pearl River Delta (2008-2020). December, 2008. pp. 2–3.

[viii] FULLER, Ed, 2017.

[ix] The National Development and Reform Commission, 2008. p. 6.

[x] HSBC, 2016. p. 11.

[xi] ’Shenzhen is a hothouse of innovation’. The Economist, Apr 8th 2017. https://www.economist.com/news/special-report/21720076-copycats-are-out-innovators-are-shenzhen-hothouse-innovation

[xii] ’What China can learn from the Pearl river delta’. The Economist, Apr 8th 2017. https://www.economist.com/news/special-report/21720072-pearl-river-delta-chinas-most-dynamic-open-and-innovative-region-says-vijay

[xiii] Oizumi, Keiichiro, 2011.

[xiv] Hilaire, Eric – Van Mead, Nick: The great leap upward: China’s Pearl River Delta, then and now. In: The Guardian, 2016. május 10. https://www.theguardian.com/cities/2016/may/10/china-pearl-river-delta-then-and-now-photographs

[xv] U. o.

[xvi] World Bank Group: East Asia’s Changing Landscape – Measuring a Decade of Spatial Growth. Urban Development Series, Washington, 2015. pp. 21–24.

[xvii] U. o. p. 36.

[xviii] UN-HABITAT: Urbanization and Development: Emerging Futures – World Cities Report 2016. pp.36–37.

[xix] A projekt hivatalos weboldala. http://www.hzmb.hk/eng/about_overview_01.html