A government-backed HK$100 billion ($12.8 billion) private equity fund was launched in Hong Kong to support high-tech industries in the Guangdong-Hong Kong-Macao Greater Bay Area.
The Greater Bay Area Homeland Development Fund is part of the Chinese government’s grand plan to integrate Hong Kong, Macau and nine southern mainland cities in Guangdong province into a world-leading economic and innovation hub.
The fund will set up a data platform, providing information about patents, intellectual property transactions and world experts, said Hu Zhanghong, chief executive officer of Greater Bay Area Homeland Investments Ltd., which operates the fund.
The fund aims to promote innovative startups in key technology fields and bring top high-tech companies to set up laboratories or research centers in Hong Kong. This will consolidate Hong Kong’s leading edge in medical science, artificial intelligence and financial technology, Hu said at the launch ceremony.
The fund will also help companies to export technologies and products to foreign markets backed by the mass-production capacity of Guangzhou and Shenzhen, Hu added.
Details about the fund and its potential investors haven’t been disclosed, but the launch ceremony attracted many senior government officials and prominent business executives from the mainland and Hong Kong, signaling the fund’s significance.
Hu served for nearly 10 years as chairman and president at China Construction Bank International Asset Management, the investment arm of one of the big four Chinese state-owned banks. He is also the chairman of the Chinese Financial Association of Hong Kong, with close relations with the central and Hong Kong governments.
Greater Bay Area Homeland Investments’ shareholders include China Construction Bank International Asset Management; Bank of China Group Investment Ltd., the investment arm of another big-four bank; and state-backed companies China Resources Group, China Merchants Group, China Taiping Insurance Group, Guangdong Holdings Ltd., Hong Kong property developer Sino Group and two offshore companies.
In addition to the executives of the shareholders, attendees at the launching ceremony as fund participants also included state-owned China National Travel Service Group Chairman Wan Min, Chinese property giant Evergrande Group Chairman Xu Jiayin, and Hong Kong shipping company Orient Overseas Chairman Tung Chee-chen, who is the brother of Tung Chee-hwa, the first chief executive of the Hong Kong Special Administrative Region.
The idea to create the Greater Bay Area was first raised in 2009 by the local governments of Hong Kong, Macau and Guangdong province, aiming to capitalize on the region’s already strong finance, manufacturing and technology capabilities to build an economic and innovation hub that could eclipse the San Francisco Bay area, Greater New York and the Greater Tokyo area.
Hong Kong, Macau and the nine cities of Guangdong ― Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing ― signed an agreement on the development of the Greater Bay Area on July 1, 2017. It was the 20th anniversary of Hong Kong’s return to China’s jurisdiction on the expiration of a 99-year lease to Great Britain.
The area, encompassing 68 million people and 56,000 square kilometers, includes some of China’s most dynamic cities, home to the country’s manufacturing base and tens of thousands of high-tech companies. Last year, the economic aggregate of the Greater Bay Area reached 11.7 trillion yuan ($1.83 trillion), about 15% of China’s economy.
The area is already accelerating its integration. Hong Kong-Zhuhai-Macau Bridge, a 55-kilometer sea bridge connecting the three cities, opened in October. Alongside the bridge, a new high-speed rail line opened to the public in September. It’s the first high-speed rail connecting Hong Kong to the mainland with bullet trains.
The new fund will also actively participate in infrastructure construction and other development projects in the area, Hu said.
By Wei Yiyang and Denise Jia (Caixin Global)