Qianhai options - a bait to see if anyone in HK will bite?

PUBLISHED : Tuesday, 09 November, 2010, 12:00am
UPDATED : Tuesday, 09 November, 2010, 12:00am

Options being considered by Shenzhen officials and academics for Qianhai include allowing Hong Kong offshore financial institutions and arbitration institutions to set up branches in Qianhai, a pilot scheme for free convertibility of the yuan, and introduction of salaries and profits taxes much lower than elsewhere on the mainland.

SCMP, November 8

Give me any one of these and I can set up an instantly successful special economic zone, too. It doesn't take a genius to figure out that you can leave the competition far behind if you can get your government to kick it out of the way.

Take this suggestion of giving Qianhai a pilot scheme for free convertibility of the yuan. Everyone in China wants to be able to exchange funny money for real money and if one little corner of Shenzhen gets the exclusive nod, that little corner of Shenzhen will undoubtedly grow rich. If I enter the winning Mark 6 number I will win the Mark 6. Hard to figure out how this works, isn't it?

Likewise the suggestion that taxes in Qianhai should be set much lower than taxes elsewhere in China. I like it. I shall try a variant of this idea on the Jockey Club one day. I am prepared to buy a racehorse if the Jockey Club will guarantee my horse a head start of half the length of the race every time it runs.

Well, why not? Why should Qianhai be the only place where people can get that kind of head start? Why not Happy Valley, too? I'll put my hand up for the trial run and if you want to tell me that I am no-one special, well, what is so special about Qianhai?

The place is a stretch of mud on the way to the Shenzhen Airport, which was filled in with excavation muck from other construction sites and declared 'reclaimed' long before that muck has had time to settle, a perfect prescription for leaning buildings and cracked walls.

We have a solid foundation here for the Pearl River Delta's new financial centre. I also suspect it was second choice. These things are always murky, of course, but do you remember the Lok Ma Chau Loop?

It is an 87-hectare piece of land that was made Hong Kong territory in 1997 by straightening a loop of the Shenzhen River. The Shenzhen authorities have ever since been in a flying mad rush to develop it into a new centre for the entire delta. But the loop is made up of contaminated mud that can only be removed at prohibitive expense and it has no roads, water, power or any other services. Most telling of all, the Shenzhen authorities forgot to pay off the reigning New Territories bosses, a big mistake. The loop remains mud and grass.

It is also notable that the Shenzhen authorities have been much less noisy about developing it recently. Methinks they've given up and decided to go with that Qianhai site a few kilometres north instead.

It was always puzzling, however, that they should have been so eager to develop the loop and so quiet when asked who owns it. I think it is appropriate to ask the same question about the Qianhai reclamation. Who owns it?

One other question I must ask. Do you boys really think that Beijing will give you a free convertibility zone and big tax cuts just for the asking or is this just bait to see if anyone in Hong Kong will bite? Happy fishing, lads, but I suggest you try a more convincing lure.

We need new thinking to break the conventions. Hong Kong is too small for the advancement of certain research areas like energy saving and new energy development. That local money could not be channelled across the border for research that has the potential to benefit Hong Kong doesn't make sense.

Tai Hay-lap, University Grants Committee

Yes indeed, Mr Tai, we need new thinking here. For instance, could we get a new theme song for academia? The unvarying lyrics of the existing one - 'Gimme me more money' - are getting a little tiresome, particularly when never accompanied by even a word of thanks for all the money the public purse has given academia.

But could you also do us a favour and define your meaning of the word 'sense'? I would have thought our best option, if Hong Kong is too small for energy research, would be to make use of other people's energy research and concentrate instead on what we can do well.

I would also have thought that a good word for pouring research money down some bottomless hole across the border is 'nonsense'. Do it with your own money, Mr Tai, but the public purse is also mine.