Nansha loses no time touting strengths

In the final part of a series on mainland economic zones, the largest of Guangdong's pilot projects is busy courting investors

PUBLISHED : Monday, 09 September, 2013, 12:00am
UPDATED : Monday, 09 September, 2013, 3:44am

Trucks and cars flow in and out of Guangdong's Nansha new area across the busy Humen Bridge - the land gateway to Nansha from Shenzhen - but in most parts of the development zone people are rather thin on the ground.

Nansha, one of the three pilot special economic and services zones in the Pearl River Delta, alongside Hengqin and Qianhai, has ambitions to attract a dozen commercial and research sectors, up to 10 international university campuses, and a cornucopia of infrastructure and entertainment complex projects. Hyperbole is not a concern.

Just south of Guangzhou and hugging the northern shoreline of the Pearl River's estuary, the zone is awaiting central government approval to allow it to offer a range of incentives to attract foreign investment. With an eye on Hong Kong companies and expertise, it is believed the incentives will allow companies and individuals from the city to pay Hong Kong-equivalent income tax rates, permit arbitration of disputes under Hong Kong law and let Hong Kong doctors freely practise in the Nansha area.

Any incentives will likely complement existing arrangements under the Closer Economic Partnership Arrangement.

Although the district has yet to finalise any sweeteners for Hong Kong and Macau investors, Nansha has advantages that Hengqin and Qianhai do not - including one of the two deep-water ports on the mainland, an existing rail-road-sea transport network, a much longer history of economic development and the most space. Nansha occupies 800 square kilometres compared with 106 sq km for Hengqin and 15 sq km for Qianhai.

Nansha is slightly larger than Singapore, which occupies 710 sq km, but has a registered population of just 800,000, compared with Singapore's five million.

Supported by a web of rail, road and sea transport links, Nansha will serve as a southern China transport exchange for the rest of the country. A key piece of infrastructure to be added is a 127km high-speed rail link running through Guangzhou, Shenzhen and Hong Kong, with a train station at Nansha. It will cut travelling times between Nansha and Hong Kong to less than 60 minutes when completed in 2015. The journey takes about 90 minutes by ferry at present.

The road network will be expanded through the Hong Kong-Zhuhai-Macau bridge, which on completion in three years will connect with the Western Delta Route running north-south between Guangzhou and Zhuhai. Together with the Guangzhou-Shenzhen Superhighway, the road and bridge will form a broad infrastructure loop and serve as a gateway to the Pearl River Delta.

"Nansha is designed to be a new Guangzhou," said Ian Fok Chun-wan, a son of late Hong Kong tycoon Henry Fok Ying-tung.

Henry Fok invested in Nansha, his hometown, more than two decades ago when it was still "very primitive", Ian Fok said. One of the drivers behind Nansha's development, the Fok family's investments have included a luxury residential development, golf course and a temple, plus more than HK$800 million in donations to Hong Kong University of Science and Technology to build the Fok Ying Tung Graduate School there.

Nansha is competing with Hengqin, an island in Zhuhai, near Macau, for investments by overseas universities and medical and healthcare institutions.

Ian Fok said the competition between Nansha, Hengqin and Qianhai was "inevitably" heating up, but added that more competition spurred improvement.

Nansha may allow up to 10 international universities to open campuses. One university that hopes to sign a final agreement within the next month to open a campus with a capacity for 10,000 students is Lancaster University.

"The attraction of Nansha to us is that Guangzhou is a major city," said Professor Robert McKinlay, a special adviser on Nansha to Lancaster University's vice-chancellor. "We are doing something in the south, away from Beijing and Shanghai. If the development works, as it probably will, it will become a major boom area and you will have a world-class university sitting there."

Final agreement on the campus deal is subject to confirmation of a £350 million (HK$4.2 billion) concessionary loan from the local government.

The creation of a university cluster would be a major coup for Nansha that could result in multiple spin-off industries and turn the zone into a hotbed of creativity.

"Silicon Valley is definitely the best model," said Professor Lionel Ni, dean of the Fok Ying Tung Graduate School. "In that sense Nansha government probably has had similar thinking."

Ni said the local government was focusing its energies on green technology and value-added industries. The government "wants to keep Nansha green", he said.

"If I offer to bring 10 billion yuan (HK$12.67 billion) to Nansha but I may pollute Nansha, they will say no for sure," Ni said.

On Hengqin, a new University of Macau campus costing 6 billion yuan has been completed. The university is managed by Macau.

Dong Ke, a member of the standing committee of the Nansha district's people's congress, said Hong Kong investors accounted for 20 per cent of Nansha's 40 billion yuan economic output each year. They are key players among about 500 firms that have invested in the district.

Dong forecast that total investment in the financial services sector in Nansha would reach 400 billion yuan in four years.

Caesar Wong, a tax partner with Deloitte, said Nansha's deep-water port offered an unrivalled edge when it came to expanding trade logistics.

"There may be some overlapping on positioning, but the three new zones can complement each other," Wong said.

For example, Hengqin, which had many high-net-worth individuals, could offer consumer banking services, while Nansha could offer trade financing services for the manufacturing and logistics industries.

Echoing the local government's upbeat mantra, Ni said: "Look at Shenzhen 30 years ago. Now Shenzhen is successful. Shenzhen is open. In the next 30 years, look at Nansha."