Formation of a free-trade zone with Hong Kong will bring no real economic benefits to Shenzhen, and could be potentially harmful, an economist says. Liu Xianfa, director of the Shenzhen Comprehensive Development Research Institute's macroeconomic research centre, said this was obvious when the economic growth of Shenzhen and Hong Kong were compared. Shenzhen's economy grew by 14 per cent last year, while Hong Kong just managed to avoid negative growth. 'The intention [of Beijing] is to save Hong Kong's declining economy and gloomy future,' Mr Liu said. 'It will bring no real benefit for Shenzhen's burgeoning economy.' Advisers to the Shenzhen Government, members of the city's legislature and academics have been promoting further integration of Hong Kong and Shenzhen and the possible creation of a free-trade zone. Sun Qilie, a Shenzhen People's Political Consultative Conference member, last week tabled a motion for free exchange of goods, people, money and information between Hong Kong and Shenzhen. Tan Gang, a delegate of the Shenzhen People's Congress - the city's legislature - even suggested a regular exchange of civil servants to improve understanding of the different systems. Feng Subao, another economist with the institute, has been lobbying for a free-trade zone, saying it was a 'unique opportunity' for Shenzhen to rejuvenate its economy as its function as a special economic zone was slowly phased out. 'Among the cities in the Pearl River Delta, Shenzhen is the one with the closest economy and living standards to Hong Kong,' said Mr Feng. 'The Special Economic Zone also has the closest system to Hong Kong. 'In addition, it has a 'second line' which shields Shenzhen from the rest of the country,' he said, referring to the border checks for mainlanders entering Shenzhen. 'The central Government is working on a feasibility study of a free-trade zone between Hong Kong and Shenzhen,' said Su Dongbin, professor and deputy director of the Centre for Special Economic Zones at Shenzhen University. 'It is definitely feasible.' However, Shenzhen University's Zhong Jian, who has been researching possible economic integration, believes the central Government will not approve the plan, as it would be of no benefit to either city. 'By having a free exchange of labour, money and goods, the second line will have to become a new Customs. It will cut off the supply of people, money and goods to Shenzhen from the rest of China.'
