China innovation hub Shenzhen poised to lead economic-rejuvenation drive with 55-point plan
- With a raft of measures to lure investors and modernise China’s innovation hub, Shenzhen’s policymakers are moving to counter trade protectionism and tech decoupling
- Between Washington’s tech siege and supply-chain shifts, Shenzhen wants to boost regional ties while appealing to foreign investors in booming manufacturing industries
China’s southern city of Shenzhen is intensifying efforts to improve the local market environment, making it more appealing to investors and boosting the region’s prowess, which a reform expert said could help it survive Washington’s technology siege and open new doors in the country’s economic transition.
The city, the forefront of China’s reform and opening up, issued three documents with 55 measures over the weekend to optimise its business environment by enhancing the rules of law, appealing to foreign business, and aligning with leading trade rules.
Looking to turn itself to China’s so-called Silicon Valley, Shenzhen is planning to further draw on international trade rules and overseas laws to attract more foreign investment and seek a stronger footing in the push for the Greater Bay Area.
The moves come at a time when all levels of government across China try to reinvigorate the economy, while Shenzhen, home to tech giant Huawei Technologies and internet services firm Tencent, can offer more experience to draw on.
It said it will upgrade its service industries and consolidate its manufacturing clusters, bringing them more into the global supply chain.
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The city seeks to strengthen cooperation with Hong Kong and Macau in terms of laws, auditing and consultancy, and vowed to develop a modern service sector contributing more than 77 per cent of the total value of the service sector by 2025.
In 2021, this figure was 76.2 per cent, which is 12.4 percentage points higher than a decade ago, but it has grown by only 0.1 percentage points compared with 2020, according to government data.
Shenzhen also vowed to become an investment hub for multinational companies by offering foreign businesses more legal and policy support and tax relaxation.
“[We will] stabilise the market expectations of foreign enterprises in Shenzhen, guide foreign investment in key areas such as advanced manufacturing … and support the establishment of foreign-funded research institutions,” the document said.
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Shenzhen is also working to simplify visa processing for foreign talents and digital payment for overseas residents, according to the documents.
“The core thing Shenzhen needs for further development is to ensure the best possible business environment for its hi-tech industries,” said Peng Peng, executive chairman of the Guangdong Society of Reform.
“After all, Shenzhen is the one that has been hit hardest by trade protectionism and technology decoupling,” said Peng, adding that the best way for Shenzhen to shake off Washington’s siege is to transform into the best business environment in China.
Shenzhen needs to strengthen its integration with international rules and regulations, and fulfil its role as a “model and core engine” to drive China’s economy, according to Peng.
“The city should explore the path [of economic transformation] for the whole country,” Peng said.
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Shenzhen will explore legal cooperation in the Guangdong-Hong Kong-Macau Greater Bay Area to turn into the main destination for foreign investors to resolve overseas commercial disputes.
Home to electric vehicle manufacturer BYD, Shenzhen also aims to promote the development of warehousing and airfreight business for lithium battery-containing cargoes, according to the documents.
As home to drone maker DJI, Shenzhen will explore legislation for future emerging industries, including the low-altitude space economy, according to the document.
In the first half of the year, Shenzhen’s gross domestic product grew by 6.3 per cent compared with the same period of last year, which was higher than Guangdong province’s 5 per cent and the country’s 5.5 per cent for the same period, according to government data.
