As mentioned previously, technology is a central feature of the YRD today, and will be in the future. As far as how such an ecosystem is to be realized in the region, the government has created plans for the four existing industry types. Traditional industries will be moved to the periphery of the region. Established industries will be clustered to increase efficiency. Focus industries will be supported in view of producing world-class enterprises while emerging industries will be nurtured as the future of the YRD’s technological aspirations.
Networks of support
To achieve its technological aspirations, China is investing heavily in digital infrastructure. From 5G network coverage, data centers, data encryption facilities and upgrades to satellite navigation capabilities, to the standardization and sharing of local government data, the advancement of digital infrastructure is intended to create an environment for the widespread adoption of new technologies, such as self-driving vehicles and smart highways.
Another area of focus is supportive government policies, which will revolve around the following: land reforms to reduce the current fragmentation and restrictions on land transfers and transactions; increasing access to professional qualifications to increase the YRD’s pool of qualified talent; and tax reforms to facilitate smoother cross-border reporting, simplify the standardized existing tax-filing requirements, and increase the sharing of tax-related credit rating information.
A final feature is the strengthening of the YRD’s intellectual property rights framework and the creation of a transaction platform for the exchange of innovative technologies. The long-term vision is to form a pipeline of high-growth and innovative enterprises, with the newly established Star Board of the Shanghai Stock Exchange to meet the capital needs of the emerging sectors.
The role of Shanghai
The government considers Shanghai to be the strategic centerpiece of the YRD’s future development. It is being positioned as the principal entry point for talent, goods, technology, and capital into the YRD, and it will play an essential role in the development and maintenance of the area’s technology ecosystems. There are three strategic intentions for Shanghai.
The first is to enable talent mobility. Leveraging the Zhangjiang Hi-Tech Park and Shanghai Free Trade Zone, Shanghai is seen as playing a pivotal role in attracting foreign talent, especially people with skillsets in new technology. To do this, the government is drafting policies to streamline access to work and residence permits for students looking to work or start a business in the YRD.
Second, based on the success of the China International Imports Expo (CIIE) to date, the role of Shanghai as an international trade hub will be strengthened. Policies to liberalize the flow of merchandise are expected to incentivize top multinationals to expand their operations in the area and designate Shanghai as their regional headquarters.
Third is to increase the efficiency of Shanghai’s capital markets. In addition to the establishment of the Star Board for technology and innovation companies, as China’s international finance center, Shanghai will play a pivotal role in further opening up the banking industry to foreign participation. It will provide support for foreign enterprises who seek to issue renminbi-denominated bonds and foreign investors who want to participate in the domestic bond market. Initiatives will include expanding the Bond Connect scheme with Hong Kong.
The YRD is an essential part of China’s future economic development, alongside Jingjinji and the GBA. Keeping a pulse on its evolution and achievements will provide a good indication of the country’s priorities and how far it has progressed toward its objectives.