Hong Kong is set to benefit greatly fromthe launch of the proposed Guangdong FTZ,which is expected to be modeled after Shanghai's,as it could be an expanded version of Shenzhen'sQianhai special economic zone, scholars andexperts said.
Raymond Yeung, a senior economist atANZ, told China Daily that Hong Kong standsto reap benefits from the Guangdong FTZ as theQianhai Shenzhen-Hong Kong Modern ServiceCooperation Zone can be regarded as a "preview".
When established, enterprises operatingin the Guangdong FTZ can borrow renminbidirectly from Hong Kong banks, just like whatthey are doing now in Qianhai, said Yeung, addingthat the Guangdong FTZ is expected to be moreopen and closely connected with the SAR.
Yeung also noted that in the ShanghaiFTZ, companies are allowed to invest beyondthe boarder of the zone through their overseasbranches under "inter-company loan", and theinvestments don't require the approval ofthe StateAdministration of Foreign Exchange.
"This could also happen in Guangdong,resulting in more companies there investing inHong Kong," he said.
Yuan Chiping, a professor and director atthe Center for Studies ofHong Kong, Macao andthe Pearl River Delta at Sun Yat-sen Universityin Guangzhou, told China Daily that the neweconomic zone could function like Qianhai.
"I expect banks, as well as other financialservices companies in Hong Kong, to enterGuangdong province to compete directly withmainland banks and other companies after thezone is established," said Yuan. Through the newFTZ, Hong Kong's services industry can beextended to the mainland, economists said. What'smore, various professional services in Hong Kongcan set up practices there, he said. Yuan noted that many HongKong companies have already established branches in Qianhai, butQianhaiis only a small area compared to the proposed GuangdongFTZ.
Peng Peng, vice-president of the South Non-governmentalThink-tank, said there are four innovative systems that Guangdongcan learn from Shanghai - the investment management systembased on a negative list; the trade supervision system focus:yg ontrade facilitation; the financialinnovation system aimed at openingto foreign participation; and a comprehensive supervision system.
According to the scheme submitted to the State CouncilinDecember 2013, Guangdong's FTZ will consist ofthree new areas-Shenzhen's Qianhai, Zhuhai's Hengqin and Guangzhou's Nansha,plus the Baiyun Airport Comprehensive Bonded Zone, covering atotal area ofabout 931 square kilometers. With the overall aim of strengthening links with Hong Kongand Macao, the three new areas will have their own specialties.
While the Qianhai Cooperation Zone will continue to focuson the development of the high-end services industry, Hengqin'sdevelopment will mainly cover tourism, commercial services,high-tech and cultural and creative industries. By comparison, thedevelopment scale of Nansha is larger, including port facilities anddedicated manufacturing districts.
"The common characteristic of the three new areas is thatthey are all important carriers for promoting cooperation amongGuangdong, Hong Kong and Macao,"said Yu Yunzhou, deputy director ofGuangdong's Development and ReformCommission.Shekou takes its place inGuangdong's FTZ
Shenzhen's Shekou IndustrialZone(SIZ) has, surprisingly,joined theproposed Guangdong FTZ.
Experts believe that thecombination of Qianhai and Shekouwill effectively facilitate the convenienceand liberalization ofthe area's financingand trading services, leading to morestartups and investments from HongKong, Macao and overseas.
The 10.9-square-kilometer SIZ,located in the Nanshan district, wasdeveloped solely by Hong Kong-basedChina Merchaynts Group (CMG) in1979-well before the ShenzhenSpecial Economic Zone came into being.
Shekou was referred to asthe "black horse" by the mainlandmedia when it comes to joining theGuangdong FTZ, but Yang Tianping,general manager of China Merchants'Shekou Industrial Zone Co Ltd,described the latest development as "anatural thing".
"Shekou has excellent logistics andport facilities," explained Yang, "It'sonly being complementary to Qianhaiif both are included in the GuangdongFTZ."
CMG had brought up the ideawith the Shenzhen and Guangdongauthorities, drawing a positive responsefrom them, according to Yang.
Department of Commerce ofGuangdong Province said takingthe SIZ into the FTZ can combineits advantageous industries, such asshipping logistics, with Qianhai'sfinancing and information industries,with the aim of raising the overallcompetitiveness of both the FTZ andthe Pearl River Delta region.
Besides the SIZ, the ChiwanContainer Terminal, which is only 20nautical miles from Hong Kong andthe gateway linking the world with thePan Pearl River Delta region, is alsoincluded.
Experts believe Shekou's inclusionis certain to benefit Qianhai. "Suchcooperation will create more spanersifiedbusiness activities for Qianhai," saidGuo Wanda, executive vice-president ofShenzhen-based think tank, the ChinaDevelopment Institute.
"The Shekou Industrial Zonecan rapidly provide facilities for thedevelopment of Qianhai's emergingindustries, and facilitate Qianhai'sfinance, technology, logistics andservice industries, development," saidGuo.
Within Qianhai's 15-square-kilometer land, CMG owns a bondedport area of 3.9 square kilometers,accounting for a quarter of the totalarea.