23/03/2026
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Synergy between Hainan Free Trade Port (FTP) and the Guangdong-HK-Macao Greater Bay Area (GBA)
By George Yeo
March 22, 2026
Achieving greater synergy between Hainan FTP and GBA takes time and must benefit both sides.
For the GBA itself, the integration of HK and Macao with the 9 cities of Guangdong is a complex process is still ongoing. There are many practical difficulties to be overcome.
This year, APEC will be held in Qianhai in Shenzhen.
China wants to show to the world that it is committed to reform and opening up. Qianhai’s special relationship to HK underlines the importance and the benefits of one country, two systems. The APEC ministerial meetings, some of which are held in HK and Macao, advertise the GBA as a growth pole for the global economy.
However, the GBA is not postive in every way for everyone.
For example, an entire sector in HK is suffering economically because Hongkongers are going to Shenzhen to shop, to eat and for entertainment.
The HK government is aware of this and has policies to ameliorate the negative effect. But as the benefits far outweigh the losses, the HK government is fully committed to the GBA.
Synergy takes time to achieve. For the GBA, the integration has an organic logic because of the position of the Pearl River Delta in Chinese geography and history. Over two thousand years ago, Qin Shihuang built the Lingqu canal north of Guilin, which enabled Han culture to flow down to the Pearl River estuary and from there to Southeast Asia and beyond. This historical position of the Pearl River estuary is embedded in the culture and mentality of the people living in the delta.
In the case of Hainan, we do not have the same history. In the Chinese mind, Hainan was distant and a place of exile, hopefully only for a short period of time. In recent years, it is viewed as a good place for tourism and retirement. Duty-free shopping adds to this perception of Hainan.
The central government gives Hainan special privileges. Making it an FTP is a great advantage. Lower taxes are also welcome. However, special policies by themselves only help temporarily. For these policies to achieve long-term results, there must be an organic connection between Hainan and the GBA. This will take time.
Better connectivity is essential. Without greatly improved connectivity between HK and Macao to the 9 cities, the GBA could not take off. People and goods now move freely. Hongkongers now think nothing of going to Shenzhen for dinner.
It is essential to set a target for the construction of road and high speed rail from the Mainland to Hainan. I know this is being studied. It is probably not economic in the short term. But there must be a sense that physical connection is not just an idea but part of a long term plan. It will greatly reduce logistics cost. Combined with Hainan’s status as an FTP, investors will then look at Hainan differently.
When we talk about synergy between the GBA and Hainan FTP, we must look at it from both sides. Hainan is likely to benefit more from greater integration in the short term. Some sectors in the GBA may benefit too but some may not. It is important to have clear policy direction. But for implementation to be successful, integration must be win-win as much as possible.
For example, it is not uncommon for people in HK to ask whether Hainan FTP can take away financial business from HK. Even Singaporeans wonder whether Hainan FTP can take business away from Singapore. Such thinking is shallow. There is much greater advantage in working together. What we need is a vision which looks 10, 20 years ahead.
Hainan’s future is much more interesting if it is integrated economically and culturally to Southeast Asia. Geographically, Hainan is part of Southest Asia.
When Southeast Asians come to Hainan, they feel at home. When I checked into my hotel room yesterday, I found a fresh coconut waiting for me.
As a separate customs area, Hainan FTP should work towards an FTA with ASEAN which goes beyond ASEAN’s FTA with China especially in services. Maybe Hainan FTP can start with Singpaore first. The better Hainan is connected to ASEAN, the more attractive it becomes to the GBA. Hainan educational and research institutions should develop the best expertise about Southeast Asia in China. Large number of students, scholars and artists should also be invited to come to Hainan who can learn about China by spending time in Hainan. The mixing of Chinese and ASEAN citizens in these institutions will create a better, more peaceful future for our region.
We can then work on a positive agenda for the South China Sea and make it an inland sea which connects China and ASEAN countries together, like the Mediterranean Sea. The South China Sea and the Mediterranean Sea are roughly the same size. The distance from Singapore to Haikou is a little shorter than the distance from Barcelona to Istanbul.
Hainan’s FTP status places it in a unique position to accomplish this task of connecting China and Southeast Asia. Kunming and Nanning have natural geographical and historical links to mainland Southeast Asia, but Hainan will have the best maritime links.
A strong relationship between Hainan and ASEAN, will also make Hainan a natural convening centre for RCEP matters. CIRD already plays a leading role in doing this.
In ten years time, such a Hainan will be very attractive for companies interested in close links with ASEAN countries. Hainan will nurture talent from China with deep knowledge of ASEAN and talent from ASEAN with deep knowledge of China. By knowledge, I include language and culture. Bilateral ASEAN-China trade already reached a trillion US dollars last year. Looking ahead, the economies of China and ASEAN will be deeply integrated. Hainan should play an important role in this integration.
Such a Hainan, rich in Chinese and international talent, will naturally be attractive to the GBA. Integration will then happen in an organic way. The GBA will then want closer links to Hainan, not as a favour to Hainan, but in its own self-interest.
