China showers policy incentives on Shenzhen as Xi Jinping pushes to create model city
- New five-year plan for southern manufacturing and technology hub stresses the need to explore and adopt a wide range of local policies
- Shenzhen said to be the natural choice for such an innovative push, as it is often cited by leaders as evidence of Beijing’s effective governance
Beijing is giving Shenzhen a “gift package” for the city’s 40th birthday – granting it autonomy to make decisions on a wide range of local policies, from land use to hiring global talent, in a broad effort to give the boom town a major role in China’s economic and technological rivalry with the United States.
While the new five-year plan for Shenzhen, which was issued by the Chinese Communist Party and the State Council on Sunday, falls short of allowing for the free flow of information or money, the blueprint includes a significant relaxation of rules on land, people, technology and money in the city.
The plan doubles down on hopes that Shenzhen will become a global leader in technology and finance and a showcase window for President Xi Jinping’s vision of an ideal Chinese society.
The document, which mentions the word “explore” 28 times, reflects Xi’s intention to make Shenzhen a testing ground for policies that support what Beijing is trying to do, but which the government is not yet ready to roll out on a nationwide basis after four decades of experimenting with an illiberal political structure and a relatively free market.
Selecting Shenzhen for these policy explorations was a natural choice, given that the story of the city’s evolution from a small fishing village into a vibrant metropolis is often cited by Beijing as evidence of its effective governance.
A key reform initiative involves land, an increasingly scarce resource for Shenzhen. The city, with an administrative area just one third that of Shanghai and one eighth that of Beijing, will have the autonomy to convert and utilise farmland for industrial and residential purposes on its own authority, without needing approval from the Guangdong provincial government nor the central government in Beijing.
The land in Shenzhen earmarked for residential dwellings accounts for only 22.6 per cent of the total land supply for development, making it one of the most unaffordable cities in China given an official population of more than 12.5 million people, according to the city’s housing development plan for 2020 published in April.