China’s free-trade zone on its border with Vietnam is fighting an uphill battle to woo investors amid US trade war

The China-Malaysia Qinzhou Industrial Park was opened in April 2012, but remains a remote, muddy wasteland without enough business to fill its largely empty units

China has tens of thousands of the designated areas across the country offering a range of incentives, but investors are still seeking overseas alternatives

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Seven and half years after the China-Malaysia Qinzhou Industrial Park opened, the first phase of the park, which covers an area about a tenth the size of Hong Kong Island, is still struggling to find enough business to fill its largely empty units. Photos: He Huifeng

Published: 6:00am, 26 Sep 2019Updated: 12:38pm, 26 Sep 2019

On April 1, 2012, China’s then Premier Wen Jiabao and then Malaysian Prime Minister Najib Razak took part in the opening ceremony of the Qinzhou Industrial Park with the ambition of building up a “hi-tech, low-carbon and international” town of half a million residents from scratch.

Seven and half years later, the first phase of the park, which covers an area about a tenth the size of Hong Kong Island, is still struggling to find enough business to fill its largely empty units. Few investors in “biomedicine, electronics and new energy” sectors have been lured to the park, and focus has shifted to “an international value chain of edible bird’s nest”. This involves importing bird nests from Southeast Asia and processing them into materials ready to be made into Chinese soups.

On a recent visit to the park, which is about an hour’s drive from the border with Vietnam, the promised new hi-tech town had not materialised and the area is still a remote, muddy wasteland. Few businesses were operating and the traffic was minimum. The only visible business, a restaurant called Three Brothers Fast Food that serves fried vegetables and sells cigarettes and drinks, targets a small group of construction workers in the park.

The development of such industrial parks is often regarded as a key factor in China’s integration into global industrial supply chains, as well as its rapid economic development.

Since the first industrial park was opened in the Shekou area of Shenzhen in 1979 to accept investment from Hong Kong, the model, which usually involves preferential tax rates, land and industrial policies for investors in a designated area, has become so popular that tens of thousands have sprang up across the country. Of these, only around 600 were approved by Beijing, with the vast majority set up by provincial and municipal authorities.