Qianhai and Hengqin zones to play leading role in development of Greater Bay Area

Qianhai, a special cooperation zone in Shenzhen city, and Hengqin, an island of Zhuhai city, both in Guangdong province, are set to further promote the high-quality development of the Guangdong-Hong Kong-Macao Greater Bay Area, officials said. Cong Liang, Deputy Director of the National Development and Reform Commission (NDRC), the nation’s top economic regulator, said the expansion of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone will provide more development space for deepening reform and opening-up in Qianhai. Cong told a news conference in Beijing: “The expansion will be conducive to promoting institutional innovation and industrial upgrading in Qianhai as well as piloting the reform policies. After the expansion, the land available for industrial development will increase substantially in Qianhai. It will better leverage Hong Kong’s advantages, strengthen cooperation between Shenzhen and Hong Kong, provide strong support for Hong Kong’s economic development, and push the further integration of Hong Kong into the national development.”

Cong’s remarks followed the announcement of two separate plans, released by the Communist Party of China Central Committee and the Chinese government, to further develop the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone and build a new zone for Guangdong-Macao in-depth cooperation in Hengqin. According to the Qianhai plan, the total area of the cooperation zone will be expanded from 14.92 square kilometers to 120.56 sq km. Cong said the new Hengqin plan aims to help Macao nurture a more diversified economy and leverage its advantages in industries like technological research and development, high-end manufacturing, cultural tourism, exhibition, trade and finance. The NDRC will formulate a catalog of industries that will be encouraged as well as a master development plan for Hengqin, to boost Macao’s economic diversification. The central authorities will implement preferential tax policies for building the Guangdong-Macao in-depth cooperation zone in Hengqin, said Vice Minister of Finance Xu Hongcai. There are specific policies for corporate income tax, individual income tax, import tax and tariffs in the cooperation zone. All industries conducive to the diversified economic development in Macao are eligible for the preferential corporate income tax rate of 15%, which is lower than the general level of 25%.

Pan Gongsheng, Deputy Governor of the People’s Bank of China (PBOC), said the central authorities will soon launch the Cross-Boundary Wealth Management Connect and start southbound trading of the Bond Connect, which are new channels for investors in the Chinese mainland to buy financial products in Hong Kong and Macao. The central government has launched pilots for residents in Hong Kong and Macao to open settlement accounts in mainland banks, and the scale and settlement volume of the financial institutions will be further expanded, said Pan. The central bank has taken measures to facilitate the use of mobile payments for residents in Hong Kong and Macao. New services include direct payment of cross-boundary electronic bills and self-service query of personal credit report, said Pan.

The PBOC is also encouraging local governments to issue green municipal bonds in Hong Kong and Macao, and to strengthen cooperation between green bond evaluation and certification institutions in the Guangdong-Hong Kong-Macao Greater Bay Area. A green financial alliance will be established in the area, the China Daily reports.

Guangdong is planning to introduce research, development and design centers of large enterprises in sectors such as integrated circuits, new energy vehicles and biopharmaceuticals into Hengqin in Zhuhai, said Guangdong Governor Ma Xingrui at a news conference in Guangzhou. Guangdong will support Shenzhen’s Qianhai to deepen opening-up and cooperation with Hong Kong in modern service sectors, using Qianhai’s port, airport and bonded zone with the aim to double commodity foreign trade of Qianhai in five years. Efforts are being made by research institutions such as the Chinese Academy of Sciences (CAS) and universities to introduce major innovation platforms into Hengqin to attract more scientific and technological institutions, professionals and enterprises. A study is on going on to establish a provincial aeronautic industrial fund in Hengqin. Guangdong and Macao will also jointly establish a development investment company and a product innovation investment fund to promote industrial diversification.