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Fair competition in the GBA

By Alex Liu

Hong Kong, 28 July 2023: Another small piece in the mammoth Greater Bay Area (GBA) jigsaw puzzle has been put in place with Hong Kong regulators and their Guangdong counterparts signing a Memorandum of Understanding on competition law.

The two authorities will hold regular meetings to share key developments regarding competition policy, legislation and enforcement in each other’s jurisdiction. As well, they will seek to promote awareness of competition law and the need for compliance among businesses, government agencies and the public.

The MoU has been signed by Hong Kong’s Competition Commission and the Guangdong Administration for Market Regulation. Commission Chairman Samuel Chan noted the agreement was “an important step forward” in the drive “to support the national strategy of developing the GBA into a world-class megalopolis”.

To recap, the GBA is a hugely ambitious and visionary concept. Beijing intends to turn the area – which includes Hong Kong, Macau and nine cities in Guangdong province – into a global economic powerhouse. It currently has a population of more than 80 million. According to latest available data, the GBA’s total economic volume exceeded RMB 13 trillion in 2022, meaning it contributed to 12% of the national GDP. If viewed as an individual economy, it has surpassed Canada and South Korea, ranking ninth in the world.

The competition policy agreement was just the latest in a string of notable GBA developments this past month. The first saw Hong Kong and Beijing sign a memorandum making cross-border data transfers easier within the GBA, a hugely significant deal that paves the way for the giant business hub to have a special role in handling data from China. The agreement, signed by the Cyberspace Administration of China and Hong Kong’s Innovation, Technology and Industry Bureau, was hailed by this city’s former Chief Executive CY Leung as an “achievement” and “breakthrough” that had been years in the making. It was especially noteworthy given that China has in recent years introduced new laws tightening controls on the transfer of cross-border data.

Next, Mainland Minister of Justice He Rong led a delegation to Hong Kong where she signed a record of meeting with this city’s Secretary for Justice, Paul Lam SC, which focused in part on enhancing co-operation on legal services and cultivating legal talent in the GBA. Both sides have pledged to increase support for Hong Kong resident lawyers who have obtained Mainland practice qualifications and to step up co-operation on dispute resolution institutions across the GBA.

Just this week comes the news that Guangzhou will work with universities and research institutes in Hong Kong and Macau to allow limited use of a “cross-border internet” for scientific research. It means academics, students and other approved citizens will be allowed to bypass China’s so-called Great Firewall to access important scientific data.

While perhaps less eye-catching than other landmark GBA agreements, the competition MoU is nonetheless significant, underscoring as it does the wider aim of achieving a level playing field for all businesses and enhancing market vibrancy. As always, the devil is in the detail. As well as broad brushstrokes on co-operation and information exchange, the MoU specifically calls for field visits, secondment of staff, training sessions, seminars and other initiatives related to competition advocacy. There is also a commitment to invite the Macau authorities to take part.

For the uninitiated, Hong Kong’s Competition Commission is an independent statutory body, established under the Competition Ordinance, which underpins our city’s commitment to a free-market economy. The organisation seeks to safeguard fairness of choice for consumers by prohibiting conduct that prevents, restricts or distorts competition, and to block mergers that substantially lessen competition.

The newly-signed MoU ensures these values will be pursued with equal vigour on a wider scale. It is a further reminder that while the GBA’s potential is vast, the rule of law and sound regulatory regimes are crucial to its growth.

Alex Liu is Managing Partner of BC&C. His key areas of practice include commercial and corporate litigation, investigations by governmental bodies such as the SFC, ICAC and Commercial Crime Bureau, insolvency and debt restructuring, intellectual property and employment matters. He can be contacted at alex@boasecohencollins.com.

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