State-owned developers with massive land banks in Qianhai stand to benefit the most from an expansion of the economic zone , as demand for houses is likely to increase on the back of a steady influx of talent. The zone, which was originally created in 2009 to foster cooperation between Shenzhen and Hong Kong, will increase in size from 14.9 sq km to 120.6 sq km to entice more businesses to open operations in the area, according to a blueprint unveiled by the State Council, China’s cabinet, on Monday. “The Qianhai zone must deepen its service trade liberalisation with Hong Kong and Macau, expand the opening up of its financial industry and legal services, as well as participate in international collaboration,” according to the plan, whose vision is to make it “world class” by 2035. The zone will see a rush of people who will come to settle down in the area, particularly talent from Hong Kong and Macau, thus increasing demand for houses, said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institute. “Those developers who already have a footprint in the area will enjoy an early-mover advantage,” she said. China Merchants Group , under the direct supervision of the state-owned Assets Supervision and Administration Commission of the State Council, has the largest land bank in the Qianhai economic zone. The Hong Kong-listed conglomerate owns some 1.48 million sq m in Nanshan district, according to figures from Real Estate Foresight, a market research firm. Grand Joy, the property arm of state-owned food processing holding company Cofco Group , owns 840,000 sq m in Bao’an district, while subway operator Shenzhen Metro Group sits on 717,000 sq m of land, also in Bao’an. Some 22.9 sq km of Nanshan district and 82.8 sq km in Bao’an district will be included in the expanded Qianhai economic zone. Qianhai currently has about 11,500 Hong Kong-invested companies, accounting for more than 10 per cent of registered enterprises that make tax contributions in the area. And more are likely to follow given the government’s plan to expand the zone and introduce further reforms. “To attract and maintain more world-class companies and talent, the government will for sure come up with follow up policies on house supply and allocation schemes to avoid a sharp increase in home price driven by speculators,” said Yan. Qianhai has seen home prices more than triple in the past decade. One residential project in January in the economic zone was priced at 112,000 yuan (US$17,350) per square metre. In comparison, the average home price in Shenzhen was 41,095 yuan per square metre in August. Some cooling measures have been rolled out already, signalling the government’s determination to keep prices in check. For example, winning plot bidders have to sell homes for no more than 92,000 yuan per square metre, according to the land sale arrangement released by the Shenzhen Housing Authority last week. This is 7,000 yuan – or 7 per cent – lower than the capped price originally planned two weeks ago. These steps will definitely help prevent a significant surge in prices, as the central government is trying hard to control home prices, said Alva To, vice-president for Greater China at Cushman & Wakefield. “The central government’s intention is to make Qianhai an international hub of industrial development and economic activities, not a market for flipping homes,” he said.