Guangdong free-trade zone plans criticised

PUBLISHED : Wednesday, 09 May, 2012, 12:00am
UPDATED : Wednesday, 09 May, 2012, 12:00am


The three experimental development zones in Guangdong have agreed to set up joint conferences to solve problems ranging from vicious competition among them to overlapping of industrial strategies, but some analysts are sceptical about the drive.

Nansha in Guangzhou, Qianhai in Shenzhen and Hengqin in Zhuhai, which have been written into China's 12th five-year plan for 2011 to 2015 as testing grounds for new free-trade-zone plans, signed the agreement in Nansha on Monday.

They plan on strengthening communication on industrial strategies, planning, economic policies and social management, The Southern Metropolis News reported yesterday.

Officials from the three zones will also meet three times a year in joint conferences to discuss important issues, the newspaper said.

Professor Zuo Liancun, who teaches at the Guangdong University of Foreign Studies and specialises in Guangdong's economic co-operation with Hong Kong and Macau, said the agreement won't solve core problems including vague and all-too-similar industrial blueprints and he urged authorities to think realistically about potential economic achievements.

'It's meaningless for the three experimental zones to talk about co-operation without [the involvement of] decision-makers from either Beijing or the provincial government,' he said, 'because all three regard Hong Kong and Macau as strategic partners, and they all want to boost their financial industries.'

Instead, Zuo said, Shenzhen's authorities should increase communication with Hong Kong to determine realistic development goals for their small, 15-square-kilometre development zone, after many of Qianhai's proposed economic reforms either stalled or were rejected by Beijing last month.

'It's only 15 square kilometres of land, and you can't expect it to become the world's financial centre,' Zuo said. 'Hengqin and Nansha should also slow down their pace and forget about their lofty ambitions. It's impossible for Hengqin to compete with Shenzhen and Dongguan in terms of GDP after lagging behind in manufacturing for three decades.'

Zhou Linsheng, a researcher with the Comprehensive Reform and Development Institute in Guangdong, said the three experimental zones could find themselves in vicious competition for resources and projects in the absence of necessary co-ordination.

'For example, both Nansha and Qianhai have applied to set up a commodities futures exchange, and all the three zones are considering developing their cultural and innovation industries,' Zhou said.

While Nansha's proposal over a commodities futures exchange is still pending, Qianhai was told by the China Securities Regulatory Commission last month that it was unlikely the State Council would approve a new exchange just months after announcing a campaign to clean up unregulated trading venues in order to prevent financial risks.

The mainland has only three commodities futures exchanges - in Shanghai, Dalian and Zhengzhou - and at least 14 other cities are vying to set up the fourth.

Zhou said the three zones should have different development strategies. 'Nansha is 800 square kilometres of land close to the manufacturing hubs of Dongguan and Zhongshan , and has huge potential to develop its manufacturing, which surely won't be included in the blueprints of Qianhai and Hengqin. Its deepwater port is also an advantage for manufacturing and shipping.'

The Pan-Pearl River Delta Regional Co-operation and Development Forum - similar to the agreement among the three experiment zones and initiated in 2003, has long been questioned for its real benefits, particularly after heralding grand plans to facilitate economic integration between Hong Kong, Macau and nine mainland provinces, including Guangdong.