Although analysts believe it might take years to establish a free-trade zone covering Hong Kong, Macau and part of the Pearl River Delta, a senior official said the region would continue to fight for one.
He Zijun, deputy director general of the Qianhai Authority, told journalists on a media tour this week that the group would continue to rally support to become part of the any future trade area.
Hopes have been lifted after the Communist Party’s Central Committee concluded with a resolution indicating there should be more free-trade zones in addition to the one already planned for Shanghai.
Although it stopped short of saying that one should be in Guangdong, the province appears to be a front runner.
“After the plenum, the state is inclined to speed up construction of free-trade zones without specifying which one,” He said. “We feel Guangdong has a good chance.”
Analysts said Guangdong has not yet submitted a proposal for a free-trade zone covering Hong Kong, Macau and part of the Pearl River Delta as it needs to work out more details.
Ding Li, an economist at the Guangdong Academy of Social Sciences, said: “It’s far from the final version, let alone ... getting approval from Beijing.”
He said it would be important for Guangdong to come up with distinctive characteristics for the proposed free-trade zone if it wants to get the approval from the central authorities.
“It means Guangdong authorities should stop asking for preferential duties or policies from the central, but think of what the central authorities really want from a free trade zone,” Ding said.
The idea, first floated by Guangdong party boss Hu Chunhua in September, generated a buzz in Hong Kong and across the border.
“Qianhai is very much qualified to become a free-trade zone due to its proximity to Hong Kong and easy access to transport links,” He said. “We are actively pursuing Qianhai to be included, but of course the final decision lies in the hands of the Guangdong and central governments.”
The Pearl River Delta free-trade zone would cover Hong Kong, Macau, Qianhai in Shenzhen, Hengqin in Zhuhai and Nansha in Guangzhou. It would be much bigger than the 28.8 square kilometre Shanghai free-trade zone.
Earlier reports said the proposal asked the central authorities to consider giving benefits such as free convertibility of the yuan, company registration reform, import and export relaxations, as well as freer internet connections.
Qianhai is a special economic zone in Shenzhen designed to work with Hong Kong with a focus in finance industries. The 389 billion yuan (HK$492 billion) project is expected to be finished in seven years.
He said a free-trade zone would provide even more benefits to Hong Kong than the Closer Economic Partnership Arrangement (Cepa), a cross-border trade and economic pact.
“Cepa is a bilateral agreement with mainland and Hong Kong governments to strengthen economic partnership,” He said. “But a free trade zone is different as it is about changing rules to give equal treatment to all parties.”
Ding said the best chance for the Guangdong FTZ proposal to impress the central authorities would be to make the most out from the advantage of Hong Kong’s efficiency and experience in free market and to create a new system that is worth an experiment.