GBA, Rail & Infrastructure

Big bay area

Beijing’s new Pearl River Delta plan announced


Zhang Dejiang: Shenzhen warning

China has been working to connect itself to the world with infrastructure projects. No state firm has looked better positioned in this regard than China Communication Construction Corp (CCCC): the essence of Chinese leader Xi Jinping’s Belt and Road blueprint is almost engraved on its company name. In recent years CCCC has been taking on new highway and railway projects in countries including Russia and Kenya. However, the company’s reputation has just suffered a blow closer to home in Hong Kong.

The Hong Kong-listed firm disclosed in a stock exchange circular this month that the territory’s anticorruption officials had raided its office to execute a search warrant. The probe is related to one of its executive directors and a share placement back in 2008, CCCC said, though no one has been arrested.

It is not known how the investigation will unfold. But Hong Kong has proven to be a jinxed destination for some of China’s more ambitious infrastructure projects.

The 42-kilometre bridge linking Hong Kong and Macau to Zhuhai, for instance, is set to commence operation in December, but only after repeated delays because of a legal challenge in Hong Kong, construction problems and going over budget. Take also the high-speed railway connecting Hong Kong to Shenzhen and Guangzhou. (CCCC is involved in both projects.) The Express Rail Link has run into stiff political resistance in the former British colony, resulting in protracted delays and massive cost overruns.

The bullet line is expected to start operating in the third quarter of 2018. But the thorniest issue – how to arrange the customs and immigration procedures for passengers – is still unresolved. To make the $10 billion railway economically viable, it’s essential to co-locate Chinese customs, immigration and quarantine facilities in Hong Kong’s territory. The arrangement would save cross-border commuters a lot of time but it would also require law enforcement by mainland officials inside Hong Kong, and thus risk contravening the territory’s constitutional document, the Basic Law (see WiC307).

Internationally, co-location border controls are a common feature for cross-border railways such as the Eurostar linking Paris to London. In fact such arrangements are already in place at Shenzhen Bay, though in this case it is the Hong Kong officials who exercise the jurisdiction on mainland soil. However, making a reciprocal arrangement for the Express Rail Link has proven to be much more controversial, as many Hongkongers are sensitive to what they perceive as Chinese encroachment on their way of life.

A couple of senior officials from Hong Kong visited Beijing this week, hoping to sort out the legal framework for co-locating customs. The Hong Kong government said it hopes to make public its plan before July 1, when the territory’s new chief executive (to be elected this month) takes office.

By that time Hong Kong will also be marking the 20th anniversary of its return to Chinese sovereignty. And it would seem Beijing leaders would like to integrate the territory further into the fabric of the country. Chinese Premier Li Keqiang revealed in his annual policy report this month that Hong Kong is a key part of his administration’s plan to forge a “city cluster in the Guangdong-Hong Kong-Macau Greater Bay Area”.

Li’s new term echoes the famed Bay Area of San Francisco and was likely coined to have an upbeat ring. But other leaders have taken a more hectoring tone with the territory in the past week. Zhang Dejiang, China’s third-ranked official, told a Hong Kong delegation that the city should “seize the opportunities” that Beijing has offered the city. If it fails to do so he warns Hong Kong’s GDP will be overtaken in two years by Shenzhen (a fishing village just three decades ago).

Such words will do little to ease tensions in Hong Kong itself, where anti-mainland feeling has surfaced repeatedly in the last two years. For the city’s younger, pro-democracy activists the Greater Bay idea is unappealing. On the contrary, they want Hong Kong to be kept more separate from the rest of China. But with the city so dependent on the mainland’s economy other Hongkongers recognise the upsides of greater integration.

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