Free-trade status for delta zone approved
A sleepy island in the Zhuhai special economic zone is poised to become a free-trade zone modelled on Hong Kong after Beijing approved pilot co-operation projects in customs, finance, revenue systems and land management.
All overseas goods shipped to the 106 square kilometre Hengqin island, next to Taipa and Coloane islands in Macau, will be exempted from import duties unless they are transported to the rest of Zhuhai or elsewhere on the mainland, Shanghai Securities News yesterday cited an unnamed source as saying.
The report also said trading among companies on Hengqin island, on the western side of the Pearl River Delta, will be exempted from value-added and consumption taxes, and qualified companies will be eligible for a 15 per cent reduction of their corporate income taxes.
Goods shipped to Hengqin will not be required to go through customs unless they are destined for the rest of the mainland, although people entering Hengqin from the Macau or Hong Kong special administrative regions or from overseas will have to complete customs formalities.
Import duties will still apply to daily commodities and goods imported for commercial real estate projects. Manufacturers will also pay value-added and consumption taxes before their products are allowed to be sold in the rest of mainland.
Niu Jing, deputy managing director of the management committee for Hengqin New Zone, refused to comment on the report other than to say that new policies endorsed by the State Council would be announced soon.
'The State Council Information Office will hold a press conference on Hengqin's new policies soon, and Guangdong's top officials will explain clauses to the media,' Niu said.
While Hengqin island remains largely undeveloped, mainland media report that a global investment promotion fair will be held in Macau soon after authorities' announcement of the latest measures, at which they will unveil plans to attract tourism, financial services, cultural innovation, Chinese medicine and health care, scientific research and hi-tech industries.
Dr Fang Zhou, assistant chief research officer of the Hong Kong-based One Country Two Systems Research Institute, said Hengqin's new policies on customs and revenue systems are similar to those at the 15 other free-trade zones set up in the mainland since the early 1990s.
'However, unlike previous free-trade zones that were set up only for manufacturing, Hengqin island will also include residential communities and shopping malls where people can spend their money,' Fang said.
He added that the new free-trade zone would not pose a threat to Hong Kong's economy in the short term.
Hengqin, Nansha in Guangzhou and Qianhai in Shenzhen were written into China's 12th five-year plan for 2011 to 2015 as testing grounds for new free-trade zone concepts. Qianhai was forced to make a U-turn on proposed reforms after Shenzhen authorities told it in June to focus only on economic development rather than learning from Hong Kong's legal system.