The Guangdong-Hong Kong-Macao Greater Bay Area is no stranger to most Hong Kong people, and this national strategy with Hong Kong’s active participation will be swiftly rolled out with resolve and willpower from the top-down approach.
Hong Kong should embrace another present opportunity of the Regional Comprehensive Economic Partnership, as China has officially completed the ratification process to become one of the 15 member states. The central government has also strongly expressed its support for Hong Kong to join the RCEP, the Asia-Pacific region’s strong trade bloc.
Initiated by the Association of Southeast Asian Nations, comprising 10 countries in Southeast Asia, exactly 10 years ago, RCEP has been recognized by strong trading players in the region, including China, Japan, South Korea, Australia and New Zealand. Covering 30 percent of the world’s population and 29 percent of both global GDP and export total volume, the RCEP is deemed to be the world’s largest trading bloc with unreleased potential. In ASEAN countries alone, small and medium-sized enterprises make up a majority of the business establishments participating in the RCEP. It will further enable SMEs to cope with challenges of global trade and facilitate trade liberalization.
ASEAN is also not a stranger to Hong Kong as it was the city’s second-largest trading partner in merchandise in 2020 and fourth-largest in services in 2019. In November 2017, Hong Kong signed a free trade agreement with ASEAN to boost its trading partnership and achieve mutual benefits. In the RCEP, ASEAN is considered a high-potential cluster with middle-to-low-income countries to leverage the trade agreement and an easy market to access for many industries from other RCEP members. With the expectation of eliminating 90 percent of the tariffs in the RCEP, China will certainly attach great importance to doing more trade with ASEAN. It will present the GBA with an extraordinary chance to take advantage of, with Hong Kong perfectly assuming the role of a super-connecter.
For example, looking at the medical industry, it is not hard to identify many opportunities in both the GBA and RCEP combined. Hong Kong should be very excited about this golden opportunity for its healthcare sector to thrive, providing services to both markets and serving as a bridge for both regions. When examining the medical landscape, many ASEAN countries have less than the world’s average of 1.57 physicians per 1,000 people. Even China’s growth of doctors has been phenomenal, crossing the world average; its 1.98 physicians per 1,000 people as of 2019 is still far below the standard of developed states like Germany at 4.25, Australia at 3.68 and the United States at 2.61. There is no surprise that most ASEAN countries don’t have sufficient hospital beds compared with the world’s average (2.89 beds per 1,000 people). Although surprisingly, the number of China’s hospital beds grew 157 percent in seven years, there’s a big disparity among different regions, where the GBA is lagging behind major economic zones in northern and eastern China.
The aging population is a global tendency that may require more and better healthcare services. The aging population is expected to increase by 3 percent to become one-tenth of ASEAN in 2030 and make up 24.8 percent of China by 2030. The elderly group leads the demand for care and treatment of common chronic diseases, compounded by the longer lifespan and better living standards. The emerging middle class in China and ASEAN will urge enhanced medical services and provide us unlimited room for the development of private healthcare and technology-enabled healthcare. It can be easily guessed the growing middle class, not necessarily at a senior age, will be more aware of health and wellness, and therefore spend more on the healthcare, especially provided by technology. In ASEAN alone, the healthcare expenditure will likely rise by 75 percent by 2025, and the entire Asia’s consumer-centric digital health market will reach $100 billion by then, sixteenfold from now, with the highest growth in telemedicine, remote monitoring, digital pharmacies, genomics, etc.
Even only dealing with China’s domestic healthcare market, Hong Kong should be amazed by how big the cake is to share. In 2014, the central government introduced a new law permitting foreign investors to hold 100 percent ownership of private hospitals on the mainland. In its Five-Year Plan, healthcare and health-tech are designated as a priority of strategic development with a goal to improving the access, quality and cost-effectiveness of the industry. It is estimated that China will achieve 198 billion yuan ($31.01 billion) in medical market size with the split of 81 percent public and 19 percent private, increasing tenfold from 2016. One of the regions for further development on healthcare is the GBA, with its highest GDP volume, rapid GDP growth, and top GDP per capita in China’s five major economic zones. With the RCEP in force, China is expected to propel its domestic healthcare market by simplifying the export of medical devices and goods from the Chinese mainland to other RCEP members, especially ASEAN countries. It will further boost bilateral trade. Hong Kong will also benefit from acting as an intermediary.
What does all the above mean for Hong Kong? It is absolutely a second-to-none opportunity on its own merit for Hong Kong medical professionals who can choose to work for two markets — the GBA and ASEAN — under the framework of the RCEP. As the GBA is adjacent with proximate advantages, Hong Kong should tap into this market first. The Hong Kong Special Administrative Region government should collaborate with the mainland authorities to tackle concerns on policy and practice for Hong Kong medical practitioners to embrace the GBA market. To facilitate the medical treatment, some eligible Hong Kong medical institutions should be encouraged to operate solely or form joint ventures in Guangdong province with incentive policies under the RCEP and permitted to use the medicines and medical devices used and registered in Hong Kong for applying in Guangdong. With the generous support from Guangdong to achieve win-win, the HKSAR government can consider establishing a designated medical park in the region, like Nansha, for instance, that can encompass different types of hospitals and medical schools from Hong Kong for people in the GBA to access private medical services and for the promotion of academic exchanges and collaboration among medical practitioners between Hong Kong and Guangdong.
The Internet Plus technology development on the mainland has been transformational, changing the healthcare landscape with the AI diagnostics and imaging. This is exactly what Hong Kong can learn from to innovate its conventional medical industry and equip with cutting-edge technology. Supported by scientific research and educational cooperation, Hong Kong’s participation in constructing technology-empowered and future-facing healthcare in the GBA will eventually help enhance the sector standards at our home base. With AI technology, there will be the elimination of language communication gaps and difference of practice habits for doctors to diagnose patients across the regions. Moreover, it is certainly the government’s duty to help alleviate Hong Kong medical practitioners’ legitimate concerns on living and welfare in the GBA. If tax subsidies can be provided to certain medical experts and residence permits granted, it will help inspire more Hong Kong doctors, especially young ones, to work across the border to contribute to the development of the medical industry in the mainland side of the GBA. In return, the GBA can use Hong Kong professionals in the region who are international and knowledgeable to assist the export trade with ASEAN on healthcare.
There is no doubt that the potential for Hong Kong’s medical industry to tap into the mainland side of the GBA is promising and sustainable. We should aim at solving Hong Kong’s healthcare problem first, with the GBA market backing up on technology and innovation. On the other hand, the GBA furnishes commercial opportunities for Hong Kong’s private medical sector to develop further, which will in return help improve Hong Kong’s overall standards. Furthermore, the ASEAN market under the RCEP will be another growth engine for healthcare exports from the GBA via Hong Kong. Needless to say, Hong Kong may not wish to miss this golden opportunity.
The author is a radiologist and non-official member of the Commission on Poverty in Hong Kong.
The views do not necessarily reflect those of China Daily.