Qianhai and Greater Bay take a longer-term development perspective
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Despite the pandemic, and the turbulent political scene at home and abroad, the efforts of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone to grow cross-border business continue apace.
A key gauge of the zone’s positive impact is the increase in the total value added by Qianhai-registered enterprises. “This has grown by 150 per cent, to 256 billion yuan, and the tax revenue has tripled, over the past five years,” explains Prof. Witman Hung, principal liaison officer for Hong Kong at the Shenzhen Qianhai Authority.
By the end of 2019, Qianhai was home to 12,102 Hong Kong-funded companies, up 420 per cent from the 2015 figure of 2,313. However, although the focus of the Qianhai authorities was initially on the number of companies registered in the zone, Prof. Hung points out that now much greater importance is placed on the amount of business these companies are doing, and the revenue they are contributing. Following the relocation of its global warehouses to the port area, the world-renowned computer manufacturer ASUS has already paid more than one billion yuan (US$141.64 million) in local taxes.
Beijing’s Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, which was published early last year, lays out a vision for a vast technology, finance, manufacturing and logistics hub built on a network of nine major cities in Guangdong, plus Hong Kong and Macau. Within the Outline Development Plan (ODP), Qianhai has been given a special role, with three main functions: first, as a zone for deeper legal cooperation; second, as a key engine of cross-border cooperation; and, third, as the new international city centre for Shenzhen.
In terms of driving cross-border cooperation, the existing Qianhai E-hub has incubated 432 startups, including 224 international entrepreneurial teams, backing them to the tune of 1.5 billion yuan. By the end of this year, E-hub Phase II, made possible with an investment of 200 million yuan (US$28.4 million) by Qianhai Investment Holding, will open for business. The total floor-space available for innovation will then be 20,000 square metres.
A number of steps have been taken to hasten Qianhai’s evolution into the new international city centre. In terms of connectivity, the Guangzhou-Dongguan-Shenzhen intercity rail line is being extended more than 15 kilometres from Shenzhen Bao-an International Airport to Qianhai. A further lengthening of the route, from Qianhai to Huanggang Checkpoint in Futian District, is also planned. On the water, a ferry route linking Qianhai and Shekou Free Trade Area and Hengqin of Zhuhai City came into service at the start of May.
Preferential Greater Bay Area (GBA) policies that Qianhai benefits from will enable Hong Kong- and Macao-based residents who work or live in the area, to purchase homes in Qianhai, enjoy access to medical services, and safeguard the rights of their children to the same education opportunities as their mainland counterparts.
Over the last 18 months more land in Qianhai has been set aside for non-commercial purposes, such as the construction of cultural facilities, hotels and exhibition halls. An international design competition has been launched to identify the best plans for an impressive new museum, that will feature cultural relics, and host education and research work, over its 120,000 square metres of floor space.
Prof. Hung does admit, though, that the COVID-19 pandemic is currently affecting the operations of Qianhai’s businesses and entrepreneurs in several ways. “Some of our entrepreneurs have either moved back to Hong Kong, or moved to Shenzhen and brought their families along, as well. In the past, it was a daily commute but now they just don’t travel anymore.”
He says supply chains have been disrupted and this disruption was particularly severe in March. Demand has also been impacted. “Europe is in trouble, the US is in trouble, and these are two of our major markets.”
But businesses are adapting to the restrictions on travel, using video-conferencing and other technologies to replace face-to-face meetings. They are also receiving more general support within Qianhai, with, for example, a two-month rent waiver for E-hub companies.
Taking a longer-term view, Prof. Hung is happy to see measures began taken to allow capital to move more freely across the border. “The flow of capital is important, as Qianhai is a financial centre.”
The PBOC and other regulatory bodies recently announced plans to open up the whole Greater Bay Area, especially for the finance sector. As with other goals listed within the ODP, these plans provide only a framework for the freer flow of capital, and it is up to centres such as Qianhai to develop specific and concrete policies based on them. “The regulatory bodies are slowly relieving some tight controls. The important thing for Qianhai is to make sure these measures are executable on the ground and that companies in our zone can benefit from them.”
