Monitor | Shanghai free zone smells like it's just another property deal
While all the talk is of financial reforms in the new economic areas, land sales suggest it's just another attempt by local officials to boost revenues
The American critic HL Mencken famously said that "a cynic is a man who, when he smells flowers, looks around for a coffin".
By Mencken's definition, then, Monitor is a cynic. Whenever anyone waxes lyrical about the stunning potential of the mainland's latest special economic district or free-trade zone, this column always looks around for a property deal.
That's why it is difficult either to get excited about Shenzhen's Qianhai area and Shanghai's new special zone, or to get worried about the threats they pose to Hong Kong's livelihood.
In each case we've heard any number of breathless tributes about how the new business district is a giant step towards financial liberalisation. Equally, we've been bombarded with endless dire warnings about how the new areas are going to eat Hong Kong's lunch, driving the city into penury.
But to Monitor, each initiative smells suspiciously like an attempt by local officials to pump up their revenues from municipal land sales.
Clearly the mainland authorities are interested in conducting controlled experiments in making the yuan more easily convertible and in gradually opening China to freer flows of investment capital. But there is no reason why they need to mark out undeveloped geographic areas in order to conduct those experiments.
In the case of capital account opening, it would be far easier just to license a limited number of existing bank branches to participate in cross-border yuan loans than to try and establish two whole new financial centres.