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More on this later. (INTRO)
Imagine a city with more than 80 million inhabitants, that is, the entire population
of Germany, but concentrated in an area the size of Croatia. Well, such a city exists, it is in
China and is known as the Greater Bay Area. Although, it is not really a city as such but
nine cities that are very close to each other. Many of them will surely ring a bell: especially
if you are VisualPolitik fans: we are talking about the place where Shenzhen and Guanghzou
can be found and where Hong Kong and Macau are also integrated. In other words, it is
the Chinese Silicon Valley. The place where the crème de la crème of Chinese development is.
And I know you're going to say: Grant, you're cheating! You started talking about a megacity
and now you're telling us that it's a lot of cities close together. If we put it like that,
we could also say that all of China is a megacity and get clickbait points out
of it. Well, the truth is that it's a special case: here we're talking about
several cities that are not only very close together but also share the same
infrastructure: shared subway, common bus lines and even shared roads.
China's idea is that residents of the Greater Bay Area can cross this megalopolis from one
end to the other in just one hour. In other words: it would be a new Silicon Valley but
bigger, more modern and in the middle of the most booming region of the planet.
So the question is, what's the problem? By now, I'm sure some of you are already in
the comments section saying "VisualPolitik are at it again criticizing China! Does it bother
you so much that China is rich and prosperous? We don't have a problem with it. Anything that
creates new poles of innovation and prosperity is great for us, whether it's in China or Vanuatu.”
In fact, for those of you who are Xi Jinping fans watching this video,
we have dozens of videos where we point out the good things about China. What's more,
if you've been following us since the beginning, you already know that we've been presenting
the good side of China since before it was fashionable, but let's continue with the story.
That said: the Greater Bay Area is a great project. But the question is, what if it
were the Chinese Communist Party that had the problem? Let's be clear, the relationship between
Xi Jinping and Chinese businessmen is getting worse and worse. For example, here's a clue.
("Jack Ma's Costliest Business Lesson: China Has Only One Leader": WSJ)
Then we also have the EVERGRANDE scandal that is causing Beijing several headaches.
And these are just two examples. In other words: Xi Jinping wants to
have large and competitive companies... but not so big that they overshadow him. And not so large
as to increase the inequalities in China, which are getting greater and greater. So the question,
the real question we are asking today is... To what extent can the Greater Bay project be a
risk for Xi Jinping? Will it increase regional inequalities in China? Today we are going to
answer all these questions. So, let's get started.
(THE CHINESE SILICON VALLEY) As everyone knows, Silicon Valley
is not a city, or even a state: it is an area encompassing several cities. However,
for all practical purposes, you can say that Silicon Valley is a large metropolitan area.
It's quite normal for a person to live in Palo Alto, for example, and go to work every day at
the Google offices, which are in Mountain View, and in the evenings go to meet their
friends in a bar in Cupertino. What's more, if you look at Silicon Valley on Google Maps,
it's almost impossible to tell where one city ends and the next begins: it's all one big
metropolitan area. An area where more than three million people live and where there is money,
talent and many, many companies together. But wait a minute because Silicon Valley is
not the only megalopolis in the world! For example, in the Netherlands they have what
they call the RANDSTAD, which is the area that integrates Amsterdam, Rotterdam and The Hague.
Again, if you look at a map, you will see that it is almost impossible to find the
line that separates one city from the other. And we are also talking about one of the world's
greatest centres of innovation and wealth. Well, the Greater Bay Area (or,
as we're going to call it from now on, the GBA) is the same thing but in China.
So what's so special about the GBA? What do they produce there? Well, pay attention.
The GBA has been a crucial region throughout history. Its ports have been a base of foreign
trade for China. In fact, almost all the foreign investment that came to China in
the 1990s came to this area. Remember that this is where Hong Kong is, which
is China's gateway to the rest of the world. To give you an idea, today, the GBA contributes
12% of China's GDP. If it were a country, it would be the 12th largest economic power
in the world. That is, it would be richer than Spain, Australia and mother Russia. And,
not surprisingly, this region has the highest concentration of Fortune 500 companies in the
country! The GBA is home to 3 of the 10 most important ports in the world.
As you can imagine, with the success that has been seen in this region, it was only a matter
of time before the government put the spotlight on it to further boost its development, stay tuned:
("China unveils Guangdong-Hong Kong-Macao Greater Bay Area development plan". Xinhuanet)
In February 2019, the government presented a development plan for the GBA,
and you may wonder, what is the objective? What goals does it want to achieve?
Well the main objective is to build infrastructure to link the nine
cities. That is, a person can live in Guangdong, go to work every day in Shenzhen
and then go to Tai Chi classes in Foshan. But not only that! China also wants to build
a common data platform for the entire GBA... What kind of data are we talking about? Well...
remember that we are talking about China: a hyper-technological dictatorship that takes data
from its citizens with facial recognition cameras, police controls and all kinds of searches.
Well, the idea is that the authorities of all these cities share all the data. I know!
It doesn't sound very good. But remember that China is not willing to prosper at the cost
of losing control of its citizens... but that's a topic for another video.
To summarize: the goals of the GBA are threefold:
The first is that people can travel between cities in a maximum of one hour. They also want to
prioritize a high quality of life and finally, to boost innovation and technology. In this regard,
Shenzhen provides the technology and Hong Kong provides the money.
And I know what some of you are thinking! Especially those of you who are less than
fans of Xi Jinping... Who is going to put up the money? Are we talking about a 100%
public project? Well, the answer is, no. Check it out.
(China's Alibaba to lead fund for Greater Bay Area via startup fund
Reuters 13 July 2021) And you will say... okay,
this is all very well but... Where is all this money going to go? According to a study by HSBC
bank, the main priorities for now are marketing companies, attracting talent and building offices.
And the main sectors where funds would be invested would be technology, finance and exports. And,
for the moment, everything seems to indicate that the GBA project is working like a charm.
(Go to a leading Beijing university, talk to some of the tech graduates and ask them,
do they want to move to Shanghai? Or do they want to move to the
Greater Bay Area. You'll see them in Shenzhen. – Joe Ngai, managing partner McKinsey GBA office)
In other words: the GBA is a fantastic idea. We don't have the slightest problem with it.
But remember that we are talking about China. And the priorities of the Chinese Communist Party
are very different from what we might have at VisualPolitik. And this is where the
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(THE VACATED CHINA)
When we say that China is growing as if there were no tomorrow, we are not really
talking about the whole of China. In reality, Chinese development has been concentrated in
three very specific areas: the Beijing area, the Shanghai area and the GBA. That is where
70% of China's factories are located. However, as we move inland, we find
regions like GANSU, which has the per capita income of countries like Kenya or Pakistan.
Take a look at this map.
Let's be fair! These areas are also growing. But the gap between rich China and not-so-rich
China is currently widening. Of course, this doesn't have to be bad news. In reality,
China's inequality stems from the fact that the wealthy areas are growing at a speed
never seen before. But do you remember that China is a communist country? In fact,
Xi Jinping's new slogan is, precisely, "COMMON PROSPERITY". That is to say that it is only now,
in 2021, when the entire Chinese Communist Party has set to work to reduce these inequalities.
And they have every reason to worry. Think of it this way: let's imagine a man living in GANSU,
one of the poorest regions in China. When this man compares himself to another man living in
Shenzhen, he is likely to feel envious. And no, in this case, there is no censorship. I mean:
you can prevent him from seeing news from outside the country – for that there is,
for example, the great cyber wall of China that we have talked about in other videos.
It might even be a good thing, from the point of view of communist propaganda, for him to feel a
certain envy towards Americans or Europeans who have a better standard of living than he does.
After all, that would justify the figure of the external enemy,
which is always handy for any dictatorship. However, the last thing Beijing wants is to
create internal tensions within China. And that explains news like this.
("China's Most Ambitious Project: One Belt-One Road". OroyFinanzas)
That's right! Xi Jinping's One Belt One Road has a double objective. The first is what we all know:
to open trade routes with the entire world. The second is to bring infrastructure and
growth to the poorest areas of China. Infrastructure like this.
(China launches first fully electrified bullet train in Tibet. Railway-technology.com)
This train would connect Tibet with Sichuan. Two of the poorest regions
of the country that will now enjoy one of the most modern trains in the world.
In other words, Beijing wants to distribute part of the wealth generated in rich China
to the less wealthy regions. Whether that will be enough to bridge the gap is another matter.
At the moment, you only have to look at Google maps to see where most of the roads
are. No matter how much is invested in infrastructure in poor China, the
southeast of the country gets the lion's share. Again, is this really a problem? In principle,
it need not be. But one thing is certain: if rich China continues to grow at the rate it is doing,
it could become too politically powerful. So much so that it could challenge Beijing's authority.
But hold on a minute because this is not the only challenge Xi Jinping may face!
(THE SWEET AND THE SOUR)
The slogan of "COMMON PROSPERITY" goes beyond closing the gaps between regions. There is also
a commitment to bridging the gap between rich and poor. Xi Jinping is increasingly distrustful of
his businessmen because he is afraid that they have too much power, or that they are "too big
to fail", that is, companies that have so much power that they could affect the whole system.
Recently there has been the case of Evergrande, of which many of you will be familiar.
It is a huge Chinese real estate company that has defaulted on millions and millions of
dollars in interest payments, Evergrande has even unleashed nightmares about a possible
"Lehman Brothers moment" in the financial market. And you will say, well this is a clear example
that Xi Jinping is right! It is a mistake that private companies have so much power! Well,
it's not entirely true, because the truth is that the Chinese government maintains a lot
of control over the economy. Remember that the main Chinese banks are state-owned. And, in fact,
everything indicates that Xi Jinping wants to increase this state control. Check it out.
("The implementation of all these anti-monopoly regulations is absolutely necessary to
improve the socialist market economy and promote common prosperity." Xi Jinping)
Common prosperity is a very clear objective that Xi Jinping has repeated on several occasions,
in which he implies that technology companies and their millionaire entrepreneurs are seen
as an alternative to political and social power in China, attacking the government.
And this is why we see regulations on companies, such as the case of Alibaba, or even measures
such as limiting the hours a Chinese child can play video games from the big gaming companies.
Proving once again that everyone in China must play under the rules of the communist party.
However, not everything is black and white, because the president also understands that he
has to support his businessmen, check this out: ("Xi plans new stock exchange in China to
boost small businesses". Bloomberg) That's right, China plans to establish
a new stock exchange in Beijing, in order to raise capital and boost small businesses. While
we have seen that the government prefers to finance its state-owned companies,
it knows that it must go hand in hand with private companies.
But what does all this have to do with the GBA? Well, a lot. We are talking about an area that
is already highly developed but still has a lot of potential. It makes perfect sense that
Beijing wants to boost it with infrastructure. It could easily become a new Silicon Valley.
But don't forget that the original Silicon Valley also has enormous political influence. So
the question is over to you, how much power is Xi Jinping willing to sacrifice in order
to boost growth in this area? Do you think the Chinese Communist Party will
ever trust the GBA entrepreneurs? Or will they try to find some way to control them?
You can leave me your answer in the comments. And as always,
don't forget that here at VisualPolitik, we release new videos every week so subscribe
to the channel and hit the little bell so you don't miss any of our updates. If you
liked this video, LIKE it and see you in the next one. Take care and see you soon.