Qianhai targets Hong Kong firms in land auctions

New economic zone in Shenzhen selling a third of its parcels of land exclusively to Hong Kong firms in a bid to attract investors from city

PUBLISHED : Tuesday, 01 April, 2014, 1:20am
UPDATED : Tuesday, 01 April, 2014, 1:20am

Qianhai is planning to auction up to 15 parcels of land this year totalling 2.6 million square metres, a third of which will be sold only to Hong Kong companies as a way of attracting more investment from the city.

The new economic zone in Shenzhen also plans to build 4,717 flats and rent them at below-market prices to Hong Kong firms and professionals who relocate there, said Zhang Bei, the official in charge of developing Qianhai. He was delivering the opening speech at the second advisory committee meeting in Shenzhen yesterday.

Qianhai last year auctioned six parcels of land totalling 2.55 million square metres for 40.7 billion yuan (HK$51.28 billion). The winning bids were mostly made by Hong Kong-registered mainland firms, raising concern that the new zone is not able to attract Hong Kong capital because of limited transparency about the benefits of moving there.

The real value of Qianhai is … how it will [promote] reforms nationwide

Mainland-backed developers bought five of the six sites auctioned last year. In this year's first land sale, in January, the site on offer was bought by a joint venture between US-based Silverstein Properties and mainland partner Shenzhen Qianhai International Energy Financial Centre. The price tag of 28,113 yuan per square metre was 74 per cent higher than that of the first Qianhai site sold in July last year to mainland-based Excellence Group.

The zone has big plans to meld into the Hong Kong economy. By 2020, Qianhai is aiming to attract 100,000 Hong Kong permanent residents to work in the region and 10,000 companies from Hong Kong to register there, Zhang said.

Qianhai plans to invest 18 billion yuan into infrastructure this year, including roads and a water purification system, doubling the outlay from last year. Zhang said the zone aims to complete all infrastructure construction by 2016.

As of March 14 this year, 5,197 firms had registered in the zone with a total registered capital of 369 billion yuan, Zhang said.

"The real value of Qianhai is not how much GDP it has created or how many skyscrapers it has built, but how it will act as a forerunner in promoting reforms nationwide," said Hua Jianmin, vice-chairman of the Standing Committee of the National People's Congress.

The advisory committee for Qianhai was established by Shenzhen officials in 2012 to pilot the setting up of the zone. The 17-member committee, chaired by Hua, is set to add six members this year, including Zhao Linghuan, chief executive of Hony Capital, and Liu Mingkang, former chairman of the China Banking Regulatory Commission.

In his speech, Hua also called for the building of a landmark that would function as a signature building for Qianhai, like the International Financial Centre in Hong Kong or the Oriental Pearl Tower in Shanghai.

"The key for Qianhai to succeed is to make sure the zone establishes a regulatory system that is in accord with international standards," said Fan Hengshan, director of the department of regional economy of the nation's top economic planner, the National Development and Reform Commission.

"Many economic pilot zones have made a lot of efforts in pushing forward new policies but in the end there haven't been that many changes. That's because a small piece of land is usually easily affected by the original system surrounding it. I hope Qianhai can make a difference," he said.