The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) is located along coastal areas in China with a leading edge in market opening-up. For centuries there have been convenient transportation and frequent business trading activities with the world. The favorable environment and business tradition nurture the most influential group of entrepreneurs in China who are known as the “Cantonese Merchants”. The culture of the Cantonese Merchants features strong market sensitivity, pragmatism and robustness, acceptance and inclusiveness, and emphasis on amiability in business. Among the Cantonese Merchants, there is a group of ethnic entrepreneurs with ambition, empathy, and a strong sense of responsibility, that pioneers the industrial and commercial development in modern China.
After China’s reform and market opening-up, relying on the geographical advantages and the preferential policies for special economic zones, the GBA achieved a giant leap in economy. Since the release of the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area in February 2019, the GBA has witnessed more fruitful development and a well-established industrial system. A series of innovation policies facilitates the interconnection within the industrial system in full range, including technology, finance, health care, logistics and commercial services. It is observed that the GBA industrial system has a distinctive cluster advantage that promotes the complementarity and integration among GBA cities. Hong Kong and Macau are designated to take on their role as proficient service providers, while nine GBA cities in the mainland including Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing are to expedite their transformation into a capital of advanced manufacturing and modern services with strategic emerging sectors as their pilot programs.1
The favorable business environment, development potential and the overall economic strength of the GBA attract numerous large-scale enterprises to invest and expand in the area. According to the public GDP figures in year 2021, the GDP of the GBA “9+2” cities (nine GBA cities in the Mainland and the Special Administrative Regions (SARs) of Hong Kong and Macau) was around RMB12,534.60 billion2,which accounted for 10.73% of China GDP. In addition, GBA cities have fostered an in-depth integration. The actual foreign investment attracted by Guangdong Province in year 2020 amounted to RMB162.03 billion, 81.75% of which (around RMB132.45 billion) came from Hong Kong and Macau3. Therefore, Hong Kong and Macau are still the priority channels for foreign investors to invest in mainland China.
A good timing with a right opportunity is important. Well-known entrepreneurs with commercial and social impact are emerging in the GBA. According to Fortune Global 500 ranking in 2021, 143 Fortune Global 500 enterprises are in the Greater China region and 25 of them are in the GBA4, accounting for 17.48% of the listed Chinese enterprises mentioned above. In addition, according to JDYD LIQUOR - Hurun Global Rich List 2022 announced by Hurun Research Institute5, China ranked the first for the second consecutive year with 1,133 entrepreneurs whose total wealth was at USD1 billion or above, 300 of them are from the GBA, including a total of 276 entrepreneurs from Hong Kong, Shenzhen, Guangzhou and Foshan. Entrepreneurs from these four cities took up over 80% of the ones from GBA on the list. With further industrial integration in the GBA, it is believed that increasingly more entrepreneurs will accumulate wealth and create value in this vibrant city cluster.
Recently EY PCS team visited a group of GBA entrepreneurs and had a better understanding of their concerns during their business life cycle, including the challenges they faced since the outbreak of the pandemic. We understand that the vast majority of these entrepreneurs operate family businesses, with family members across generations working in the same enterprises and/or holding shares of the enterprises. Their main concern is on how to achieve sustainable development in their family and business performances under an environment with constant emerging disruptions.
Portraits of the GBA entrepreneurs
According to our observations, the GBA entrepreneurs may mainly be classified into the following three categories, each with their unique characteristics and challenges: