China’s big Shenzhen plans aim to transform the Greater Bay Area, and Hong Kong’s role is critical
- Shenzhen has been the nation’s shining beacon of reform and opening-up for decades, and new guidelines released this week show it will continue to be for years
- Deeper institutional reform is greenlit for the southern metropolis just ahead of next month’s three-year anniversary of the Greater Bay Area strategy
Shenzhen – the nation’s frontier of reform and opening-up for the past four decades – has received the green light to pursue deeper institutional transformations by improving market access in a wide range of sectors.
These cover technology; finance; health care; education and culture; and transport, according to a blueprint jointly published on Wednesday by the National Development and Reform Commission, which is the country’s top economic planner, and the Ministry of Commerce.
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The document essentially serves as an updated to-do list for a six-year plan (2020-25) to turn Shenzhen into a “pilot demonstration zone for socialism with Chinese characteristics” by 2025.
“Shenzhen aims to be a world city while Hong Kong can serve as a reference,” said Thomas Leung, managing partner of markets at PricewaterhouseCoopers (PwC). “At the same time, Hong Kong is entering a new phase to find its position within the strategic development of China.”
A joint report issued on Friday by PwC and the China Development Research Foundation also suggested that Hong Kong and Shenzhen collaborate in six sectors – fintech, biotech, AI, electric vehicles, renewable energy and low-carbon technology.
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The new plan also reiterates China’s push to acquire and develop more cutting-edge innovations in the city known as China’s Silicon Valley. For instance, international platforms will be established to improve semiconductor sourcing and data exchanges as China strives for technological self-reliance amid its trade rivalry with the United States.
“The cross-border flow and integration of data is a great breakthrough [in the guidelines],” said Yu Shiyang, big data director at the State Information Centre, in an interview with state broadcaster CCTV on Wednesday. “In the region, we can combine the advantage of both Hong Kong and our market to promote the flow of data at home and abroad.”
Shenzhen’s executive vice-mayor, Huang Min, also played up the geographical advantages of his city being so close to both Hong Kong and Macau, noting at a press conference on Wednesday that it affords more opportunities for cross-border e-commerce, cross-border payments and supply-chain management, to name a few.
Shenzhen Mayor Qin Weizhong echoed that sentiment at the press conference, saying the new plan will “further strengthen cooperation between Shenzhen, Hong Kong and Macau”.
Shenzhen still needs to learn from Hong Kong’s experience in institution building to achieve a market-oriented, law-based and internationalised business environment
However, the new plan did not go into much detail about the possible opening-up measures that would be aimed at Hong Kong and Macau, and there was even less mention of the impact it could have on foreign investors, according to Yu Zongliang, an analyst with the China Development Institute, a Shenzhen-based think tank.
“[The document] does not take the type of market entities or the nature of ownership as a factor, and it gives no special treatment for foreign investment. Rather, it is based on objective and fair market behaviour and industries,” he said in an article published on Thursday.
The new plan should also soften the restrictions over access to more sectors in Shenzhen and is expected to create a more attractive market climate for global investors.
“The measures to ease Shenzhen market access are as important as that of the free-trade port,” said Peng Peng, executive chairman of the Guangdong Society of Reform, a think tank with ties to the provincial government.
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Huo Jianguo, the former head of a think tank under the commerce ministry, also spoke to the importance of Hong Kong becoming more integrated into the Greater Bay Area, in terms of economic development.
“Shenzhen still needs to learn from Hong Kong’s experience in institution building to achieve a market-oriented, law-based and internationalised business environment,” he said. “Otherwise … taking that step toward high-level opening-up is likely to be difficult.”
And a big part of that opening-up, he said, is the issue of fair market competition.
“We have said a lot but done less in this respect, and we have not yet made a breakthrough,” Huo said. “Now, if Shenzhen has the right conditions, of course it can set an example.”
