White Collar | Shenzhen asked to lead charge again on economic reform
China wants the special economic zone to do more and it will be a much tougher assignment this time
Shenzhen has been the leading city in the mainland as far as economic reform since 1978. Now mainland China wants the special economic zone to do more and it will be a much tougher assignment this time.
Turn the clock back 35 years, Shenzhen was the first economic zone to enjoy special tax, regulation and other special incentives. There was no competitor at that time.
Now Shanghai has set up a Free Trade Zone in 2012, which enjoys special yuan transfer and other financial policy incentives. Shenzhen is no longer the only one to enjoy the benefits of a special policy.
Shenzhen has new economic zone called Qianhai which also enjoys special tax and other policies. But Shanghai is such a big giant that Shenzhen combined with Qianhai will still find it hard to compete with its rival.
The Shanghai stock market cap and turnover is much bigger than the Shenzhen Stock Exchange.
Premier Li Keqiang visited Shenzhen last Monday and announced a plan to tie up stock markets between Hong Kong and,Shenzhen for cross border trading, after a similar link between Shanghai and Hong Kong was launched in November. This will boost the outlook for the Shenzhen Stock Exchange.
