Another big idea - but will they make the move?

PUBLISHED : Saturday, 14 January, 2012, 12:00am
UPDATED : Saturday, 14 January, 2012, 12:00am


Shenzhen authorities unveiled a 285 billion yuan (HK$350.25 billion) plan this week to turn the city into a global logistics hub by 2015 and make Qianhai, a 15-square-kilometre development zone next to Hong Kong, a global centre for supply chain management.

According to Shenzhen's latest five-year plan on logistics, a three-square-kilometre Qianhai Bay tariff-free zone will become the heartland to attract global supply chain firms, with tax discounts, special bank loans, simplified administrative measures and other preferential policies. But how many of these castles in the air will come true?

Dr Fang Zhou, assistant chief research officer at the One Country Two Systems Research Institute, said the aim of becoming a 'global centre for supply chain companies' may be too ambitious.

It's hard to argue with him given what happened in Qianhai last year. A host of bold reforms - covering Qianhai's administrative and political systems and economic development - have been proposed since the reclaimed land north of Shekou was designated by the State Council in August 2010 as a 'Shenzhen-Hong Kong modern service industries co-operation zone' that should be turned into 'the Manhattan of the Pearl River Delta' by allowing it to test some groundbreaking ideas.

They include turning Qianhai into a small Hong Kong by giving it financial independence and more autonomy in its legal system and administration. Shenzhen authorities even thought about inviting Hong Kong people to help manage the area and set up a Hong Kong-style anti-corruption system.

However, Shenzhen dumped nearly all its bold plans for Qianhai in June and told the development zone to focus only on its economy, with a final version of Qianhai's administrative regulation, approved by the Standing Committee of the Shenzhen People's Congress, deleting almost all the experimental measures that promised to learn from Hong Kong's experience.

Before that, Shenzhen authorities claimed in January last year that Qianhai would be given its own laws, regulations, tax scheme and personnel system, and Shenzhen's laws and regulations would apply to Qianhai only if such coverage was explicitly stated. They said there would be a Hong Kong-style Independent Commission Against Corruption and an ombudsman, and a report early last year said Qianhai was poised to make history with a draft regulation requiring all top-level officials to declare their incomes and financial records.

Shenzhen mayor Xu Qin promised that Qianhai would 'adopt a more open ideology, more innovative thinking and a more international horizon to draw lessons from developed countries, Hong Kong and Singapore'.

Zhou Rongsheng, deputy director of the Shenzhen People's Congress' legal committee, was quoted by mainland media as saying that the U-turn had been made because 'Qianhai is still at the beginning stage of attracting investment and construction. Its management shouldn't take on too many responsibilities besides economic development.'

Many other bold proposals in Shenzhen have met similar fates. In May, the city government's System Reform Office reopened, three years after it was shut down after angering interest groups with a huge and controversial plan to make the public sector more market-oriented. Although the new office has been given the task of proposing, organising and supervising reform, many critics doubt whether Shenzhen, the test tube of Deng Xiaoping's economic reforms three decades ago, can still carry on with fearless reform in the face of opposition from numerous interest groups.

A research report released on Monday by the Kai Feng Development Research Institute and the sociology department at Tsinghua University pinpointed why mainland reforms often fail. 'The problem is that interest groups deform reforms and benefit from reforms, which makes the public oppose and fear further reforms,' it said. 'Not only are substantial reforms obstructed, even the word 'reform' becomes undesirable.'