The COVID-19 pandemic is both a challenge and an opportunity for Guangdong, said Wei Jianguo, vice-chairman of the China Center for International Economic Exchange and former vice-minister of commerce. The middle and late stages of epidemic provides us with a good chance to attract foreign investment. The province should develop into a destination to attract top global resources as part of the Belt and Road initiative and Greater Bay Area development.

(File photo / Nanfang Daily)

Global supply chain moving to China

Q: What do you think about the supposition that foreign capital might withdraw from China during the epidemic?

A: As a rule industries gather in areas with huge consumption potential, like China, which is also currently a good place for R&D, manufacturing and logistics with low investment costs and high production capacity.

Therefore, a withdrawal will not take place. And after the outbreak of the virus, the global supply chain will likely move to the Northeast Asian economic circle (including China, Japan and Korea) becoming another world industrial center.

Q：How will the global supply chain move eastward?

A: Firstly high-end industries including intelligent manufacturing, big data, new materials have already begun moving to the east, especially to China. For example, BASF from Germany and Exxon Mobil Corporation both have invested more than one trillion dollars to build chemical and petrochemical bases in Guangdong.

In addition, high quality technology and talent are moving here. MIT's first center for innovation outside the US has been established in the GBA. The area's preferential policies such as lower personal income tax helps to attract international professionals.

What's more, high-end health, medical and service industries will enter Chinese market soon.

Valuable opportunity for Guangdong to pursue high quality economic development

Q: Will the epidemic change the world's current industrial division? And how should Guangdong respond?

A: Yes, there is an urgent need for globalization. Significant changes will take place in the global industrial chain, countries that previously only engaged in processing may adapt to both processing and general trade after the epidemic. Production factors, capital and human resources scattered around the world will be increasingly concentrated.

Hence, China will play a more important role in global supply, production and service chains with the Belt and Road initiative and Regional Comprehensive Economic Partnership accepted by more countries.

As for Guangdong, the introduction of large-scale projects will be a booster for the national economy after the epidemic. It is also a valuable opportunity for Guangdong to pursue high quality economic development with a higher level of opening-up.

Further reform should be launched across the Greater Bay Area and Guangdong FTZ, such as implementing a shorter negative list, expanding the opening range of insurance, finance and intermediary institutions to attract investment.

Authors: Will, Zero (intern)

Editor: Simon