The Pearl River Delta in 2020 and beyond The Canton Benefit The Pearl River Delta in 2020 and beyond Alberto Vettoretti Managing Partner Dezan Shira & Associates

Contents What is PRD: The importance of a leading global economy The role of large-scale infrastructures. Connecting the dots… Current and future challenges Looking at The Crystal Ball: What is next for PRD?

1. What is PRD: The importance of a leading global economy

Austria 374 bn $ GDP 84,000 km2 land size Over 6 % Between 2 and 4 % Between 4 and 6 % Austria 374 bn $ GDP 84,000 km2 land size Source: NSB, ABM Graphic @ Asia Briefing

Countries comparison – Guangdong and Europe 2015 GDP (USD bn) 4th 1.35 times more inhabitants than Germany 6th = to France in terms of trade (import + export) 8th 2 times Austria’s land area 14th 16th 17th 27th 34th 3 times Austria’s economy Source: HSBC, HKTDC Graphic @ Asia Briefing

The Greater Pearl River Delta Graphic @ Asia Briefing The Pearl River Delta (PRD) is a sub-region of Guangdong Province, including 9 cities. Together with the cities of Macau and Hong Kong they form the Greater Pearl River Delta (GPRD). HK, M SARs

Source: GD Stat. Yearbook

2. The role of large-scale infrastructures. Connecting the dots…

Connecting the dots… Map of PRD FTZs HK - - Shenzhen South 14 mins. HK Guangzhou South 48 mins. HK Zhongshan 100 mins. Intercity railway length will double between 2015 and 2020 Highways/bridges will increase by 20% HK Zhuhai 45 mins. Map of PRD Source: CBRE, DSA

3. Current and future challenges

Problem solving Time-frame A freewheeling and glorious past has brought many challenges going forward… Lack of top talents and top schools Uneven regional development PRD Branding and reputation Inter city competition Hard IPR Workers social tensions Pollution Internet speed and censorship YRD competition Problem solving Schooling for foreigners Increase industrial productivity Ease of doing business for FIEs Commuting in the region Health Care for foreigners Easy Time-frame Long term (10 to 20 years) Short – medium term (3 to 5 year) Source: EUCCC, DSA

4. Looking at the crystal ball: what is next for PRD ?

Clusters of excellence will thrive and produce world champions… Top retailing, e-tailing, sports and leisure centre Automobiles and parts, electronics, manufacturing, business services and education outsourcing, petrochemical World class light manufacturing, home appliances, robotics, automobile and parts World class manufacturing, design and sourcing centres Global financial and “professionals” centre, touristic hub World class logistics, shipping and warehousing centre E-Vehicles, high-tech, finance, modern logistic, design and cultural centre, IT, software, digital innovation World class R&D and Silicon valley with Chinese characteristics World’s n.1 casino, leisure and entertainment area Map of PRD

Key trends going forward Guangdong Source: CEIC Graphic @ Asia Briefing

Multiple “spillover” effects across the Greater PRD GZ – FS - Nansha Shenzhen – Dongguan HK – Shenzhen

Key trends going forward: tap into ASEAN – OBOR 600+ million people living in 10 high growth countries form the world’s 3rd largest market 7th in the World Combined real GDP of USD $2.6 trillion in 2015, ASEAN is one of the biggest, fast moving economies - on track to be the 4th largest by 2050 28 years Median age compared to 40+in the EU US$ 125 billion In FDIs in 2015, (135 bn in CN)

Thank you ! Alberto Vettoretti Managing Partner Dezan Shira & Associates alberto@dezshira.com