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China plans to tie Hong Kong, Macau closer to mainland in bid to challenge Silicon Valley

HONG KONG — China’s State Council unveiled a sweeping plan to link Hong Kong and Macau with cities in southern China to create a so-called Greater Bay Area, aiming to make it a high-tech megalopolis to rival California’s Silicon Valley.

The plan, issued by the Xinhua News Agency late Monday, said the government will seek to turn the area into a leading global innovation hub, boost infrastructure connectivity between cities, and strengthen Hong Kong’s role as an international center of finance, shipping and trade as well as the center for the offshore yuan business.

The Greater Bay Area is challenged by diverging social, legal, and customs systems, which have impeded the free flow of resources, according to an outline of the plan. A comprehensive blueprint can “add new impetus into the development of Hong Kong and Macau” and help build a “world-class cluster of cities,” it said.

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The region, with more than 67 million residents, would boast a trillion-dollar economy and eclipse Japan as the world’s fourth-largest exporter, according to HSBC Holdings.

The long-awaited plan has led to some unease in Hong Kong that further integration will erode the autonomy that allows the city to maintain separate legal, monetary, and political systems from communist China’s.

China has already spent billions of dollars on infrastructure projects linking the cities, and the plan now envisages a strategy for the region that stretches to 2035.

President Xi Jinping last year inaugurated a $15 billion, 34-mile bridge, the world’s longest sea crossing, linking Hong Kong with Macau and the mainland city of Zhuhai. In September, Hong Kong plugged into China’s 15,500-mile high-speed rail network with a futuristic new terminus overlooking Victoria Harbor.

The railway faced resistance from Hong Kong democracy activists because of the location of the Chinese border crossing in the terminus building. They argued it would undermine a constitutional ban on mainland law enforcement officers operating in the city. Hong Kong passed the enabling legislation in June, but only after China’s national Parliament stepped in to ratify the plan.

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Under the blueprint, the major cities of the Greater Bay Area will establish themselves as hubs for different sectors.

Hong Kong will focus on international finance, navigation and trade. Macau will be an international tourism city and a platform for trade with Portuguese-speaking countries such as Brazil. Guangzhou, formerly known as Canton, will take a role as an administrative hub while Shenzhen, home to Huawei Technologies Co., will expand its role as a special economic zone and tech hub.

The government will support Hong Kong and Macau banks and insurers in setting up units in some cities including Shenzhen and Guangzhou, according to the document. China will also study setting up a yuan-denominated securities market in Macau.