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Bridge to business

June 2018


With the opening of the Hong Kong-Zhuhai-Macau Bridge, Martin Evan-Jones reports on why Zhuhai is the new growth opportunity for Hong Kong businesses



A new highway to profitability for Hong Kong-based businesses focused on Mainland China – that’s how senior Big Four executives describe the Hong Kong-Zhuhai-Macau Bridge (HKZMB), expected to open in the second half of this year.

Zhuhai, a prefecture-level city on the southern coast of Guangdong province, is seen as the next big opportunity on the Mainland across infrastructure, real estate development and services, which include high-end affordable living, hotels, tourism, medical and eco-areas and technology services. As the city jumps from “small to big,” Hong Kong services are set to contribute to and facilitate Zhuhai’s increasing foreign direct investment (FDI).

For Hong Kong-based CPAs, advisory services and initial public offerings (IPOs) are also part of China’s latest goal to transform Zhuhai as a hub for the western Pearl River Delta and propel China’s Greater Bay Area Initiative to become the largest and most lucrative “bay area” in the world.

“Out of the 11 cities in the Greater Bay Area, Hong Kong and Zhuhai have the first and tenth largest gross domestic profit (GDP), respectively. The HKZMB will offer a new dimension to boost Zhuhai’s economy, and enhance con- nectivity to Hong Kong and other cities in the Greater Bay Area,” says Ayesha Lau, Managing Partner for Hong Kong, KPMG China.


From small to big

The availability of space and generally lower property prices in Zhuhai spells profit for property developers in Hong Kong, who have been buying property within the Mainland city for the last three years.

They are likely to be rewarded with a great value deal by the opening of the HKZMB creating more convenient transportation between Hong Kong and the western Pearl River Delta. Selected property prices are already beginning to rise from a low base on the prospect.

PwC’s Assurance Partner Hong Kong, Loretta Fong, asserts: “Zhuhai’s GDP compound annual growth rateis one of the highest in China at 11.7 percent from 2008 to 2017: it also ranks fifth in terms of GDP per capita at 153,000 yuan with a population of only 1.7 million.”

Indeed, PwC’s Chinese Cities of Opportunities report this year, covering 30 leading Mainland cities, assesses Zhuhai as top under transportation and urban planning criteria. The city was also rated first for culture and quality of life, with its urban development strategy scoring for scientific development, education goals, balanced industrial distribution and research and development, among other sub-categories.

Furthermore, Dennis Chow, Southern Region Managing Partner of Deloitte China describes Zhuhai’s 9 percent annual GDP growth as “faster than most cities in China, with consumption growth leading other cities in Guangdong Province.” Chow also says Zhuhai had 12,000 project starts over the past five years, repre- senting some US$13 billion in FDI.

About 900 companies invested in by Hong Kong investors are established in Zhuhai’s Hengqin special zone adjacent to Macau, according to Hong Kong-based news website EJ Insight, many engaged in innovation and technology as well as tourism. Faster and cheaper links to Hong Kong via the HKZMB are expected to energize those investments and broaden corporate opportunities.


Consultants for Hong Kong, Zhuhai and Macau expect daily traffic flows across the HKZMB to reach 29,100 vehicles in 2030 and 42,000 in 2037.

Bridge work

With three bridges, three artificial islands and an undersea tunnel, the HKZMB stretches over 55 km to connect the three cities across traffic routes. The HKZMB reduces the road from Hong Kong to and from Macau and Zhuhai to within one hour, ensuring the western Pearl River Delta is within three-hours drive from Hong Kong.

The bridge’s development challenges include 10 worker casualties, cost overruns of 10 billion yuan, an alleged “fake concrete” case, possible subsidence of artificial islands to support the bridge as well as protests over endangerment to ocean life. However, the bridge is still set to be the largest and most operationally efficient of its type in the world. Consultants for Hong Kong, Zhuhai and Macau expect daily traffic flows across the HKZMB to reach 29,100 vehicles in 2030 and 42,000 in 2037, with daily passenger trips of 126,000 and 175,000.

The main bridge in Mainland waters and the link roads and ports in Hong Kong, Zhuhai and Macau will be open 24 hours daily. The bridge link will include 24-hour transport services in Hong Kong, as well as cross-boundary shuttle bus services, coaches, hire cars, goods vehicles and private cars. However, coordinated information has yet to be released on the investment in and full gamut of transport services to be offered.



Fireworks explode over the world's longest cross- sea bridge, the Hong Kong-Zhuhai-Macau Bridge, after the major work of the bridge was completed in Zhuhai city on 31 December 2017.


Cross-boundary shuttle bus services linking Hong Kong with Zhuhai will be operated by a consortium comprising the Hong Kong-Zhuhai-Macau Land Transportation (Macau) Corporation, the Zhuhai Yuegong Xinhai Transportation Company, and the Hong Kong Zhuhai Macau Bridge Shuttle Bus Services.

The South China Morning Post reported that a one way trip from Hong Kong to Zhuhai is to cost HK$80 via the joint venture transport shuttle bus service, operating up to 140 buses  daily between the three-city checkpoints – substantially lower than the current coach and ferry links between Hong Kong, Macau and Shenzhen.

One Bus Hong Kong Macau, operating 19 of 34 permits issued by the Hong Kong government and formed by nine investors, is expected to run a fleet of 19 luxury coaches – costing HK$95 million in total – to Macau and Zhuhai and charge between HK$160 and HK$180 per trip.

In addition, a consortium including Kwoon Chung Motors, China National Travel Service (HK) Group, Chu Kong  Shipping, Shun Tak Group and the Motor Transport Company of Guangdong and Hong Kong have won a five-year extendable franchise to operate a 24-hour inter-city bus service with a total investment of HK$500 million, according to EJ Insight.


An investment centre

Zhuhai aims to establish itself as an innovation-driven city developing smart manufacturing, robotics and smart homes. The city has pillar industries including electronic information, bio-pharmaceutical products, electrical appliances, petrochemicals and precision machinery, according to the Hong Kong Trade Development Council. There is also a significant agricultural and marine economy focused on its port with manufacturing accounting for 35.6 percent of its utilized FDI in 2017.

PwC’s Fong says Zhuhai is uniquely situated on the western side of the Greater Bay Area, and is well connected, linking it within and outside the Mainland. “In [Chi- na’s] 13th Five-Year Plan (2016- 2020), the metropolis is expected to be connected to an integrated transportation network, including the Guangzhou-Foshan-Jiangmen-Zhuhai Intercity Railway with an investment of 40 billion yuan. It also has the convenience of having its own airport – Zhuhai Jinwan Airport – and is adjacent to the coastline. This certainly gives a great advantage for the import/ export of goods in and out of the Chinese Mainland.”

Much focus is on the Zhuhai’s environmental and residential opportunities. “The HKZMB will enhance connectivity to Zhuhai, which will help develop a quality living environment in the city, encourage residential development, and create greater opportunities for new infrastructure and real estate players,” says Lau of KPMG. She adds that Hong Kong developers have significant experience and capabilities to capitalize on these opportunities.



Tourists walk under a huge LED screen displaying videos of marine life at the Chimelong Ocean Kingdom, the largest ocean theme park in the world, in Hengqin island of Zhuhai


“Zhuhai is known as the ‘garden city’ with a lot of land – over 70 percent available – with ecological value. With a number of tourist spots and a theme park close by, it has a lot of potential to build an eco-tourism industry and receive a substantial uplift in GDP,” says Fong.

Chow at Deloitte is particularly enthusiastic about opportunities for Hong Kong retirees – so-called “elderly tourism”– given the closer proximity to Hong Kong hospitals and medical centres with the opening of the HKZMB, believing that a number of Hong Kong companies are interested in creating and supporting new elderly-friendly property developments in Zhuhai.

A source in the Hong Kong insurance industry said that relocation of local elderly policy holders to Zhuhai will lower risk factors while increasing new insurance business, provided that appropriate residential accommodation is available, and immigra- tion back and forth across the boundary checkpoints is smooth.

“Zhuhai is a very ‘livable’ city with good air quality and many places to go on packaged holidays. I strongly believe Hong Kong leisure and tourism companies will benefit from ‘tourism in two cities’ linking Zhuhai and Macau,” Chow says. “Additionally, Hong Kong International Airport is already a hub for tourism in and out of the Mainland, and I believe it will become more significant still.”


“It also has the convenience of having its own airport – Zhuhai Jinwan Airport – and is adjacent to the coastline. This certainly gives a great advantage for the import/export of goods in and out of the Chinese Mainland.”

How CPAs can take part

As part of the Greater Bay Area Initiative, individual cities are encouraged to introduce policies that will reduce disparities in terms of industry focus and capabilities. “Hong Kong CPAs can assist in this policy setting by harmonizing education, social security and medical care, for example. The success of the initiative cannot be achieved without facilitating the movement of people within the bay area,” says Fong of PwC.

Lau adds, “development opportunities in Zhuhai will require financing, and Hong Kong’s CPAs and professional services firms are well-placed to advise on a range of areas, including finance, tax and insurance.”

State-level goals to develop Zhuhai’s technology sector and port development, for example, will require domestic and international CPAs to facilitate success, and Chow sees opportunities for those in Hong Kong. “We can envision bus-loads of CPAs travelling to Zhuhai,” he quips. With established centres in Macau and Shenzhen, Zhuhai is yet to be on the agenda for a new Deloitte office, and Chow says the firm is watching developments closely, with possible merger and acquisition prospects.

With international exposure, Hong Kong CPAs can assist in further promoting FDI into various industries in Zhuhai and arranging for Hong Kong-based IPOs. “While there are mutual exemptions on professional qualifications and work experience for Mainland and Hong Kong CPAs,” says Fong, “the overall demand for CPAs is expected to increase, and further collabora- tion will be essential.”


“We can envision bus-loads of CPAs travelling to Zhuhai.”

Edmund Wong, Practising Director at Patrick Wong C.P.A. Limited, and an Institute member, believes some of his clients might take this opportunity to establish their presence in Zhuhai and/or Macau to better serve customers in those areas. This, he says, is where Hong Kong CPAs come in. “As Institute members, we are well trained and equipped with a broadened global vision, and have international experience. We can serve as the middleman and bridge our clients to appropriate professional parties in China to explore new markets, providing valuable advice to our clients in the process,” he says.

Wong, a member of the Institute’s Small and Medium Practitioners (SMPs) Committee, says that with the opening of the bridge, this is the time for SMPs to differentiate themselves from the competition, and support the internationalization of small businesses. “I strongly encourage our fellow members to join Institute study missions and tours to different cities in China, establish relationships with local CPAs, and look for opportunities,” he says. “Our connections, experience, knowledge and exposure are actually valuable assets and we should unleash them.”


PwC’s Chinese Cities of Opportunities report this year, covering 30 leading Mainland cities, rated Zhuhai first for culture and quality of life, with its urban development strategy scoring for scientific development, education goals, balanced industrial distribution and research and development.

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