The development of the Greater Bay Area (“GBA”) is accorded the status of key strategic planning in China’s national development blueprint. The aim is to drive innovation and reform by fully synergising the best qualities of Guangdong, Hong Kong and Macao to promote the regional economic development for the benefit of all. With an area of around 56,000 km², and a population of over 71 million in total, the GBA’s visionary transformation into an international bay area attracting global businesses and investors will open up immense opportunities for different sectors, particularly the service sector including legal services.
The clear Central Government policy in driving the GBA development results in GBA being always the first benefactor of government’s liberalisation policies. For example, the formation of a partnership association between a Hong Kong law firm and a Mainland law firm was initially restricted to Qianhai, Nansha and Hengqin in 2014. The geographical restriction was relaxed and the measures relating to partnership associations were extended to cover Guangzhou, Shenzhen and Zhuhai in 2016, then the whole of Guangdong Province in 2017 before it was finally opened to the entire Mainland in March 2019. GBA is thus always where businesses can reap the benefit of reforms before other regions. As of July 2020, 11 partnership associations between Hong Kong and Mainland law firms have been set up, with six in Shenzhen, two in Zhuhai and three in Guangzhou.
Another example is the capital injection requirement on the Hong Kong firm in a partnership association. The Hong Kong firm partner used to be required to contribute not less than 30 percent (but not more than 49 percent) of the total capital injection of the partnership association. The minimum 30 percent capital injection requirement on the Hong Kong firm partner was first removed in the Guangdong Province in August 2019 before it is to be applied to the entire Mainland, which was announced to take place in June 2020 pending further details.
Further, the Central Government announced on 6 November 2019 that eligible Hong Kong legal practitioners, upon passing a special examination, will be qualified to practise in specific areas of Mainland law in the nine Mainland cities of the GBA. We are awaiting further information on the commencement date and implementation details. This is a much welcomed breakthrough as it provides an avenue to enable experienced Hong Kong lawyers in identified practice areas to qualify as Mainland lawyers and helps strengthen the talent pool to support the growing demand of multi-jurisdictional legal services in the Mainland and the Law Society has been lobbying for this for years. Again, the GBA is the first location considered for implementation of this welcomed reform.
In addition, just recently on 29 June 2020, the People’s Bank of China, the Hong Kong Monetary Authority and the Monetary Authority of Macao jointly announced the introduction of the cross-boundary wealth management connect pilot scheme (Wealth Management Connect, “WMC”) in the GBA. WMC will allow residents in the GBA to invest in wealth management products distributed by banks in the region.
Because of the COVID-19 pandemic, there may be disruptions to the progress of the GBA development. Fortunately, any such disruptions will only be temporary. The clear long-term strategic direction in nurturing the GBA into a world-class bay area will not be affected.
The Law Society’s liaison with our counterparts in the GBA continues uninterrupted notwithstanding the outbreak of COVID-19. We just held our 4th joint meeting with the lawyers associations in the GBA via video conferencing and exchanged useful information on ways to deal with the practical challenges arising from the pandemic. These challenges include, for instance, the impact of the restrictions on travel on legal services that require personal attendance like notarial services. To facilitate closer liaison and step up complementary collaboration with our GBA counterparts, the joint meeting will be held quarterly (instead of the current interval of once every four months) and additionally, there will be a meeting among Secretariat representatives once a month.
Innovation and technology is one of the focuses of the GBA. Coincidentally, technology is also the obvious solution to many of these practical challenges caused by COVID-19. As one of the founder members of an online dispute resolution platform known as eBRAM (electronic Business Related Arbitration and Mediation), the Law Society also takes every opportunity to promote the platform to our GBA counterparts. The platform provides an efficient, cost-effective, and safe platform for resolution of disputes, including commercial and investment disputes under the Belt and Road Initiative and cross-border disputes. The smart contract platform on eBRAM will also provide an interface for cross border deal making between enterprises.
The pandemic has put everyone to the test in every way, and we have full confidence that Hong Kong with its strong resilience will sail through the test. For our part, we will continue to work hard to optimise our global network to promote Hong Kong’s legal services for the benefit of our members.