Can real reform take root in Qianhai?

While Xi Jinping has endorsed Shenzhen's experimental zone, local officials appear reluctant to take risks

PUBLISHED : Monday, 04 March, 2013, 12:00am
UPDATED : Monday, 04 March, 2013, 5:42am

The pace of progress in converting Qianhai, an ambitious experimental zone in Shenzhen touted as the "Manhattan of the Pearl River Delta", is expected to pick up after Beijing approved its development blueprint last month.

But experts remain divided on whether Qianhai will meet its lofty goal of helping to transform today's China like the first special economic zones in Shenzhen and Zhuhai did 30 years ago.

Top-level support for the Qianhai project is not in doubt. President-in-waiting Xi Jinping made Qianhai a stop on his first tour after taking over as Communist Party general secretary late last year.

But questions remain as to whether political leaders in today's more prosperous nation share the drive and willingness to take a big gamble that their predecessors did in the 1980s.

Xi's trip in December was widely seen as a nod to the past - after all, his father, Xi Zhongxun , pioneered the special economic zones. The success of these SEZs in turn provided models for the changes under Deng Xiaoping that have driven China's economic reforms over the past 30 years.

When the younger Xi toured Qianhai, he was looking at a 15-square-kilometre strip of empty land. But he must have hoped that in the next decade or so, this could do for China what the little fishing village of Shenzhen did for the country three decades ago.

A meeting last month of officials from two dozen central ministries and institutes, led by the powerful National Development and Reform Commission, discussed and approved the next step for Qianhai.

The meeting agreed to speed up the building of infrastructure of the experimental zone and approved a slew of projects proposed by the local authorities. These include allowing Hong Kong investors to set up international schools in Qianhai, operate hospitals solely managed and run by professionals from Hong Kong and set up a cross-border digital data centre. Shenzhen mayor Xu Qin has pledged to spend as much as 10 billion yuan (HK$12.3 billion) this year on infrastructure in Qianhai.

"By 2015, the GDP of Qianhai will reach 50 billion yuan," Xu told local media, "ten times more than the current level."

The bullish comments and the strong start have resurrected many people's hope in the Qianhai project. The idea has been floated many times in the past but started to take shape only two years ago.

The initial idea was bold. Some suggested that Qianhai should not simply be an experimental economic zone - it should also be used as a laboratory where the mainland could pilot administrative and legal reforms based on the Hong Kong model.

There was talk of a new graft watchdog along similar lines to the Independent Commission Against Corruption, as well as changes to the legal system borrowed from across the border.

But by last July, when the State Council finally approved the policies that would be used to develop Qianhai, all such ideas were dropped. Instead, the new policies focused exclusively on the economic side, covering six fields; finance, taxation, human resources, education, medical and telecommunications.

Xi's visit raised hopes that the administrative and legal side of the experiment would be revived. While in Qianhai, Xi told local officials: "Please carry out reform boldly. The central government has granted you very special policies. Qianhai will be a place for renewal of the service industries."

And even though economic issues continued to dominate discussion of Qianhai, hopes still flicker that administrative and legal reforms will follow.

"I'm sorry to say the room for reform in Shenzhen has been shrinking. The idea to set up a ICAC-type of anti-corruption agent has been quickly put on hold," said Guo Wanda , vice-president of the Shenzhen-based China Development Institute, a municipal think tank.

"But Xi's visit to Shenzhen has encouraged people to be bold again. We should seize this opportunity and calls for more reforms," he said.

Ding Li , an economist at the Guangdong Academy of Social Science, also said Shenzhen leaders should introduce more daring reforms to Qianhai. "The future vision of Qianhai should be an improved version of Hong Kong - a Hong Kong-like system but under the leadership of the Communist Party," he said.

Ding said Qianhai could be a testing ground that embraces the advantages of the two different systems and overcome their shortcomings. "Qianhai should look for more space for trial and reform while retaining governance by the party," he added. "For example, Qianhai could have a free market and a clean and efficient legal system and administration like Hong Kong, while avoiding the great wealth gap of capitalism."

Ding said that after 30 years of economic reform, China had to rethink its growth model to sustain its development. Xi and his new leadership had to come up with fresh ideas to rejuvenate China's reform efforts.

"Jiang Zemin has his 'three represents' and Hu Jintao has his 'scientific development theory'. Xi also needs to come up with a new governing philosophy," he said.

"A good special zone should not passively wait for Beijing's instructions. Its leaders should actively think what they can contribute to this new governing philosophy," Ding said. He said Xi expected Guangdong leaders - just like his father did 30 years ago - to show a daring spirit of reform and come up with a good solution to the nation's problems.

"For instance, can Guangdong learn from and improve on Hong Kong's anti-corruption experience, to establish an effective system, with socialist characteristics, in fighting corruption?"

Ding and Guo believe Xi will not explicitly give Qianhai instructions on how to carry out the next stage of reform. Instead, Beijing will give the local officials a mandate to experiment.

But many experts are pessimistic as to whether Qianhai can be the next Shenzhen. For one thing, after three decades of reform, many leaders have lost the appetite, while entrenched interests have become too powerful.

"I don't really believe Qianhai can breathe new life into the Shenzhen leadership," Guo said. "They are so comfortable with their success, nobody wants to take risks any more.

"Thirty years ago, they had nothing to lose and a lot to gain. Now Shenzhen is so rich and comfortable. The local leaders have a lot to lose. Who will want to risk their career trying new things? All this so-called studying Hong Kong is just a show to pacify their superiors."