3rd International Conference on Business, Economics, Management Science (BEMS 2021)

The Advantages and Disadvantages of 's Deep Participation in -Hong Kong-Macao Greater Bay Area Shipei Du School of Finance and economics, Guangdong University of science and technology, Dongguan, 523083, China [email protected] Abstract. In the science and technology innovation corridor of , , Hong Kong and Macao, Guangzhou, Dongguan and Shenzhen have their own characteristics in science and technology industry differentiation and innovation mechanism, forming complementary cooperation. As an important node in the science and technology innovation corridor, Dongguan is facing significant historical opportunities. Based on Dongguan, this study deeply explores the advantages and disadvantages of the cooperation between Dongguan and Guangdong, Shenzhen, Hong Kong and Macao, analyzes the new opportunities and challenges, and promotes the development of science and technology Enter Dongguan and deeply participate in the Guangzhou Shenzhen Hong Kong Macao science and technology innovation corridor. Keywords: GBA; Advantages; Disadvantages.

1. Introduction Guangdong, Hong Kong and Macao Bay area (GBA) is an urban agglomeration (9 +2) composed of Hong Kong and Dongguan special administrative regions and Guangzhou, Shenzhen, , , Dongguan, Dongguan, , and in Guangdong Province. It is the fourth largest Bay Area in the world after New York Bay area, San Francisco Bay area and Tokyo Bay Area in Japan. Under the background of the construction of Guangzhou Shenzhen Hong Kong Macao science and technology innovation corridor, Dongguan, as one of the important node cities, has been given the goal of building into a supporting point for the integrated development of the East and west sides of the Pearl River, a hub city in the coastal economic belt, and an important pole of Guangdong, Hong Kong and Macao Bay area. Around these goals, Dongguan has carried out extensive cooperation with Guangzhou, Shenzhen, Hong Kong, Macao and other places.

2. Advantages of Dongguan's Deep Participation in GBA 2.1 The Location Advantage of Dongguan is Obvious Dongguan's location advantage is prominent. Dongguan, located on the East Bank of the Pearl River Estuary, is an important node city in Guangdong, Hong Kong and Macao. Under the background of regional economic integration, Dongguan City takes the construction of open transportation as the direction, constantly improves the important position of Dongguan in regional transportation, gives full play to the supporting and guiding role of transportation in economic development, actively undertakes the industrial radiation of Hong Kong and Macao, Guangzhou Nansha, Shenzhen and other free trade zones, and upgrades Dongguan from "intermediate city" to "central city" ”From "node city" to "hub city". At present, the highway system of Dongguan has initially formed a traffic network with "high- speed highways as the leader, national and provincial highways as the skeleton, and first-class highways connecting towns and streets", and put forward a "five vertical, four horizontal and six connected" highway grid bureau to build a "one hour" commuter circle with surrounding cities. With the opening of the expressway along the Yangtze River, as well as the opening of Guangzhou

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Shenzhen Hong Kong high-speed railway, Guangzhou Dongguan Shenzhen intercity rail transit, Dongguan's geographical advantage as the core axis of Dawan district will be further strengthened. In addition, almost all of the scientific research projects are located in the Pearl River Corridor from the East Bank of Dongguan to the Pearl River Innovation Park, and then to the East Bank of Guangzhou. Dongguan is in the middle of this innovation corridor, connecting the South with the north, connecting the East Bank of the Pearl River Estuary, and boosting the innovation and development of the . Finally, Dongguan, taking the opportunity of the national urban joint distribution pilot, focuses on planning and constructing the regional layout of the logistics industry of "one port, three belts and six parks", focusing on the construction of the manufacturing material supply center and the finished product storage and transfer center facing the Greater Pearl River Delta region, the logistics supply and reserve base of means of living, and the two-way material distribution center connecting the greater Beijing Kowloon Line and the Pearl River Delta region It is the rear area of urban logistics of Guangzhou, Shenzhen, Hong Kong and Macao. 2.2 Dongguan has a Good Industrial Foundation Nowadays Dongguan has become a typical city for the development of Intelligent Manufacturing in China, and the smart phone industry has become a new economic growth point. In 2016, the shipment volume reached 255 million units, accounting for about 20% of the world. One out of every five smart phones in the world are produced in Dongguan. This achievement benefits from Dongguan's vigorous implementation of "Dongguan manufacturing 2025 strategy" and "robot intelligent manufacturing" plan, focusing on cultivating advanced manufacturing industry and high- tech manufacturing industry, further promoting the development of manufacturing industry to intelligent, information and green, and accelerating the transformation of Dongguan from a big manufacturing city to a strong manufacturing city. Since the reform and opening up, Dongguan has embarked on a unique road of export-oriented economic development, with an average annual economic growth rate of nearly 18%, becoming a modern manufacturing city with global influence, forming pillar industries such as electronic information, electrical machinery and equipment, textile and clothing shoes and hats, food and beverage, paper and paper products, and cultivating smart phones, new energy and led Optoelectronics, new flat panel display and other emerging industries have built a complete set of modern industrial system. In terms of cooperation with Hong Kong and Macao, Dongguan, as a pioneer of national reform and opening up, a key city for Guangdong to implement the CEPA pilot policy, and a comprehensive pilot city for the new open economic system, has accumulated experience in cooperation with Hong Kong and Macao. As of July 2018, there are more than 7400 Hong Kong and Macao funded enterprises in Dongguan, accounting for more than 60% of the total number of foreign-funded enterprises in the city. Hong Kong funded enterprises account for more than half of the total number of foreign-funded enterprises in Dongguan, with a total of 57.69 billion US dollars in contractual foreign investment. There are about 254 enterprises in Dongguan "going out" to invest in Hong Kong, with a total investment of about US $640 million. In addition, Dongguan has carried out various forms of cooperation with Hong Kong and Macao in cultural and creative, financial, professional services and other fields.

3. Disadvantages of Dongguan's Deep Participation in GBA 3.1 Dongguan's Traditional Development Mode of "City Governing Town" is Facing a Bottleneck Since the reform and opening up, Dongguan City has implemented the two-level flat management mode of "city governing town", which has greatly stimulated the enthusiasm of town development and bred many powerful professional towns. However, in recent years, with the rising cost of land, labor and other factors, Dongguan's economic development under the management mode of "city governing town" is facing the bottleneck problem of "four unsustainable", that is, the development

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mode dominated by traditional professional town is unsustainable, the development mode dominated by land expansion is unsustainable, and the development mode dominated by town is difficult to implement innovation driven development It is difficult to build a livable city with the existing urban spatial layout. Under the "city governing town" management mode, due to the administrative division between towns, it is inevitable that there are some problems, such as scattered resource advantages, similar industrial structure, weak cross town industrial chain, extensive economic growth mode and so on. In this regard, in 2019, Dongguan City will strengthen the overall planning of functional areas, optimize the system reform of directly administrating towns, and select Songshanhu high tech Industrial Development Zone (Ecological Park) and its surrounding 9 towns (Shilong, , , Dalang, Hengli, , Qishi, Shipai, ), and 5 towns (Zhongtang, Wangniudun, Machong, Hongmei, Daojiao) for pilot projects, with the most successful results To a large extent, it can stimulate the vitality of the system of directly administrating towns, and provide a strong guarantee for the construction of "bay area city, quality Dongguan". However, because the township is not a first-class administrative structure after all, there are still many difficulties in the decision-making and implementation of specific matters. This is not conducive to the economic cooperation between Dongguan and Guangdong, Hong Kong and Macao as a whole. 3.2 Dongguan's Manufacturing Industry is at the Low End of the "Smile Curve" and its Economic Added Value is Low In the value chain, the production process is divided into six parts: trial product development, parts production, module parts production, assembly, sales and after-sales service. In different stages of product production, the added value obtained by enterprises is not the same, so the advantages obtained are not the same. As far as the added value is concerned, the two ends of the smile curve, that is, the added value of design and sales is higher, while the added value of processing and manufacturing in the middle is lower, and the enterprises engaged in this stage of production get lower income. Using the "smile curve", we can analyze that Dongguan's manufacturing industry is in the middle of the "smile curve", that is, it is mainly engaged in processing and assembly. At this stage, the manufacturing enterprises have a greater disadvantage. They are squeezed by the upstream and downstream enterprises at home and abroad, with small profit margin and difficult situation. In addition, Dongguan is lack of independent brands and backward enterprise services. For a long time, Dongguan manufacturing industry is at the bottom of the product value chain. OEM is the main way for Dongguan manufacturing industry to participate in the global production network. Although many Dongguan manufacturing enterprises produce good quality products, widely favored by consumers at home and abroad. However, due to the lack of independent brands, Dongguan manufacturing plays a behind the scenes role in the international market, producing for most of the world's famous brands, earning a small amount of processing fees. The lack of independent brands is an important reason why Dongguan manufacturing has been in a passive position in the global production network for a long time.

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