China’s Future Lies on its South: The Rise of the Guangdong-Hong Kong-Macau Greater Bay Area

In the stadium, thousands of people are celebrating the return of the National Games of the People’s Republic of China to Guangdong after 24 years. This time, however, as the Guangdong delegation entered the stadium, it was accompanied by two other teams: for the first time in the history of the National Games, it was hosted by 3 different regions—Guangdong, Hong Kong, and Macau. In short, it is also called the “Greater Bay Area” (GBA) National Games. In fact, this geographical concept was incorporated into the game motto that went viral in China: “Passionate National Games, Vibrant GBA.” 

Formally conceptualized at the 13th Five-Year Plan in 2016, the region was an expansion from the original “Bay Area” around the Pearl River Delta. Incorporating southern Guangdong and the Special Administrative Regions of Hong Kong and Macau, the GBA accounts for less than 1% of China's total land area. Yet, with such a small amount of land, it contributed more than 10% of China’s GDP in 2025, valued at around US$2 trillion. At the same time, the GBA is also extremely populous, with a population of around 85 million people. Moreover, since the coinage of the name, this city cluster was entrusted with great economic responsibility and a historical mission of becoming the driving force of China’s economy.

The Battle of City Clusters: Will the Yangtze River Delta Always Lead? 

The rise of the GBA is the result of both geographical advantages and governmental planning in constructing city clusters. Incorporating such construction as its national strategy, the government had designated four major city clusters in China: Jing-Jin-Ji (Beijing, Tianjin, Hebei) Economic Region on the north; the Chengdu-Chongqing Twin City Circle on the west; the Yangtze River Delta Region (YRD, Shanghai, Zhejiang, and Jiangsu) on the east; the Greater Bay Area on the south. Together, these four city clusters constitute half of China’s GDP. 

While the Jing-Jin-Ji and Chengdu-Chongqing Regions are designed with the primary focus of supporting the regional economies of the North and the West, respectively, the YRD and the GBA are entrusted with the mission of leading the growth of China on a national scale. Therefore, comparisons about these two areas are often made; some perspectives, such as this PwC investigation that analyzes China’s regional economic development, champion the YRD as “China’s leading regional economic cluster.” Economically, the YRD accounts for almost a quarter of China’s GDP. Furthermore, it is also the most populous region among all four city clusters, with over 240 million inhabitants, ensuring an adequate human capital supply. 

But, will the YRD always take the lead?

As outlined by the government, these city clusters are charged with the goal of ensuring “sustainable, high-quality growth” with each cluster tasked with specializing in certain industries. Therefore, any projection about these regions’ future development must be based on analyzing both the region itself and its specialized industries. By analyzing changes in domestic policy and international trade, I argue that the GBA, with a higher emphasis on technology and finance industries, has greater economic potential than the YRD, as it relies less on international trade, a factor that has become increasingly unstable in recent years.

Ports and Factories vs. Capital and Code: Diverging Industries of the GBA and the YRD

Both the YRD and the GBA are the national leaders across many of China’s industries—but with different emphasis. The YRD, due to its geographical advantage as the Yangtze River estuary, takes a dominant role in the manufacturing and domestic/international trade industries. For example, the YRD has established 25 “national-level advanced manufacturing clusters,” which account for more than 30% of the country’s total number of “manufacturing clusters.” Furthermore, with its highly developed infrastructure, as the PwC report indicated, “over 24 airports, 9,500 kilometers of railway, and 16,000 kilometers of highway,” domestic trade is also greatly facilitated. In terms of international trade, with the world’s largest and third-largest ports of Shanghai and Ningbo-Zhoushan, respectively, 7 billion tons of cargo are transported annually. As a result, these world-class ports have made more than 40% of China’s export shipping from the YRD.

On the other hand, the GBA specializes in technological innovation and the finance industry, while also utilizing its geographical advantages as a coastal region in conducting international trade. Specifically, the city of Shenzhen, as the connecting point between Hong Kong and the Mainland, was commissioned with the goal of becoming “A globally influential hub of innovation and creativity.” And, Shenzhen has fulfilled this mission well. As of 2025, Shenzhen hosts 25,000 new high-tech companies, which is approximately 12 firms per square kilometer, making Shenzhen the city with both the highest number and density of innovation in China. These have made Shenzhen take the leading role in many high-tech industries worldwide. For example, the Shenzhen company DJI (Dajiang Innovations) holds a 70% share of the global civilian drone market.

On the financial side, with Hong Kong as one of the most important financial centers in the world, the GBA aims to develop “deep collaborations in the finance industry within the major cities of the GBA.” This has been a great success, as Hong Kong (#3, top of Asia) and Shenzhen (#9, fourth of Asia) both ranked as the top ten financial centers (Shanghai ranked #8), according to the Global Financial Centres Index.

Finally, with coastal regions like Shenzhen and Hong Kong, the GBA does not lose its geographical advantages in international trade. While the absolute trade volume is not as high as that of the YRD, the GBA’s international trade industry, which accounts for 20% of the nation’s total trade volume, is growing at a very high rate of almost 5%, accounting for one-fourth of the nation’s trade volume growth.

Shifting Tides: Why Tech and Finance May Outpace Trade

Both regions have a compound specialization of industries with the effect of “1+1 > 2.” For the YRD, this is the manufacturing + exports; for the GBA, this is the finance + innovation + exports. Therefore, when we are projecting the future development of the two regions, we are essentially making our judgment based on 1) the prospect of industries that each region is specialized in and 2) the prospect of the integration of these industries.

In the past, China emphasized developing an export-oriented economy. As a result, the YRD’s manufacturing and international trade industries experienced drastic growth over the past decades. However, since the 2010s, both internal and external changes have made China shift from its export-oriented economy to a transitioning economy with priorities in “high quality technological development.” Internationally, the past and current trade and tariff conflicts, along with the geopolitical conflicts, have made international trade much more volatile. As noted in the recently published 15th Five-Year Plan, “the international economic and trade order faces severe challenges, and the global economy lacks sufficient momentum for growth.” As a result, in the plan, the government outlined its primary economic goal in the next 5 years as “strengthen the domestic economic cycle.” From this document, it is clear that Beijing is putting more emphasis on the development of the domestic economy. From here, science and technology development is then pinpointed as one of the key goals of economic development. 

Therefore, the GBA has greater opportunities for future development as most high-tech companies are based in the GBA (in Shenzhen, specifically). On the Hurun top 10 Chinese companies ranking, 4 of them are Shenzhen companies focusing and thus specializing in technology (e.g., New Energy, media, telecommunications…), while only 1 company (Alibaba) in the YRD focuses on technology. In the PwC report on the YRD, it claimed that “Many renowned tech companies like Tencent, BYD, Huawei, and Alibaba have a significant presence in the YRD” to show the technological competence of the YRD. Ironically, however, Tencent, BYD, and Huawei are all based in Shenzhen. 

Prompted by this change, the future of the integration of industries also looks brighter for the GBA than for the YRD. As the YRD previously relied heavily on international trade, its current economic structure of “manufacture + export” needs to undergo significant transformation under the current global geopolitical and domestic policy changes. While this change is certainly feasible, it takes time and, more importantly, in the short run, a mature domestic market is still under construction and therefore will not be able to supplement the reduction of international trade in the short run. For the GBA, however, while it also has a decent level of emphasis for international trade, its specialized industry, technology, is supported by the government. Furthermore, the financial hubs of Hong Kong and Shenzhen can also provide strong monetary support for technological innovations. Therefore, both the region’s local financial support and the favorable policies from the government on technological innovation allow the economy of the GBA to be more resilient when it comes to external changes. 

The YRD, especially the city of Shanghai, has played an important role in shaping modern China, and it will certainly, along with the entire YRD, take an active role in driving the country’s development in the future. However, in terms of its relative competitiveness, while the YRD is still the most important economic region of China until now, the Greater Bay Area, with its primary focus on technology and complementary advantage in the finance sector, will hold stronger in the face of the current changes in the country’s economic orientation and the world economy. However, the GBA and the YRD’s goals should not be to compete with each other, but rather to create a “1+1 > 2” effect on the economic development of China, just as different industries in these two regions have created a “1+1 > 2” effect for the regional economic development.