The central government has issued a guideline to “accelerate the improvement of its socialist market economy in the new era”, which analysts are saying is the boldest economic reform launched by the current leadership since President Xi Jinping took office.
According to Xinhua, the country’s goal is to “build a high-level socialist market economy that is more systematic, mature and well-shaped”, which would keep public ownership “as the mainstay” while allowing “multiple forms of ownership to develop together.” It stressed minimizing the government’s “direct allocation of market resources and direct intervention in microeconomic activities.” Read Xinhua for the full text.
Continue reading Beijing announces sweeping economic reforms
Merging the three different legal systems of the GBA
will be no easy task, but it must be done before the two SARs end their terms,
in 2047 and 2049. Progress is being made in this regard by cooperation among
various entities in special International Arbiration Centers.
It could be said that the Greater Bay Area’s most
formidable challenge lies in integrating its three vastly different legal
systems. Macau’s is based on Portuguese civil law; Hong Kong’s on British
common law; and the mainland’s on a unique “socialist legal system”. This not
only makes the drafting of legislation and regulations difficult if they are to
be applied in cases affecting people and companies from all three
jurisdictions; it also makes it tough to resolve commercial disputes among
entities doing cross-border business.
As a step in this process, mainland legal experts and
judicial officials have been working on ways to set up arbitration centers for
commercial disputes run along internationally accepted principles and codes of
conduct. Hong Kong and Macau already have well-established centers, but now
Guangdong is pushing hard to catch up.
The most prominent and advanced of these is based in
Qianhai, Shenzhen’s special zone, while two others, in Zhuhai’s Hengqin and
Guangzhou’s Nansha, are being given attention and resources in an effort to
Continue reading Greater Bay arbitration centers growing
Shenzhen will see fixed-asset investment continue to grow strongly in 2020, the city government says, with projects under way budgeted to cost around 177 billion yuan, 23% more than 2019.
Infrastructure will be a big part of this, including 12 rail transit projects under construction. Others include the redevelopment of Binhai Avenue in Nanshan, where the futuristic Shenzhen Bay Headquarters Base is being built, and the establishment of a National Science Center in the Guangming “Science City” district.
Continue reading Shenzhen to keep investing, while ‘considering private participation’
Now that 2020 is 15 days old, and the US and China have a deal (sort of) on trade, it might be time to shake off the New Year’s hangover and knuckle down to understanding the opportunities available to investors in the world’s 11th-largest economy.
A good way to start would be to read the Foreign Investment Law, which went into effect on January 1. It brings in some major changes in how foreign investors are treated, offering increased protections. For new investors, it makes it a lot easier to incorporate and navigate the bureaucratic minefields, although it is still important to understand the different company structures available to foreigners, which can vary depending on the industry. It also opens new sectors of the economy to foreign investment and, particularly, opens the Belt and Road Initiative to foreign capital.
Continue reading New Foreign Investment Law takes hold
Guangdong Governor Ma Xingrui says the province will continue to push reforms, especially in its financial system, and will continue to promote innovation as the economy’s structure is transformed. Educational institutions would be key for this, and investment would be allocated accordingly.
Continue reading Guangdong to deepen financial opening and innovation
As Guangdong rolls out an ambitious blockchain-based financial and regulatory platform, local governments are casting further light on how it fits into a bigger scheme of the state providing better support to companies in the private sector. Zhaoqing, one of the Greater Bay Area’s smaller economies, yet with the most room to grow, has leaped in with both feet, rolling out a package of 10 measures to support SME development.
Continue reading Zhaoqing boosts SMEs with 10-point plan
The Guangdong Market Supervision Bureau had a busy year in 2019, and its results are something to crow about: By the end of the year, processing time for startup companies had been reduced by nearly 50%, while one-third of application materials had been cut. This benefited no fewer than 193,000 new enterprises, local media reported.
This brought the province’s total number of “market entities” to 12.533 million, a year-on-year growth of 9.4%, and still No. 1 in the country – for seven years running.
It wasn’t all fun for the Market Supervision Bureau, however. It also strengthened antitrust law enforcement, investigating no fewer than 45,000 cases over the course of the year, dishing out 470 million yuan in fines for violations.
Continue reading Company supervision efficiency improves
Is a bold new way to recruit and manage talent at state-owned enterprises being experimented with in Zhuhai? It might be, judging by an announcement today by the city government that it will allow “market-oriented recruitment” to play a greater role in the selection of corporate leaders.
Accordiong to local media, Zhuhai envisages “fully implementing the market-oriented recruitment mechanism and incentive restraint mechanism”. By 2022, state-owned assets supervision will “mainly focus” on management of capital – 1.5 trillion yuan worth of local SOE assets, to be precise – rather than human resources.
Continue reading Zhuhai sees new way for SOEs to groom talent
A groundbreaking legal seminar was held in Guangzhou this week, wherein judges and lawyers from the Greater Bay Area’s three jurisdictions of Hong Kong, Macau and Guangdong conducted mock trials of a cross-border trademark protection case. Each followed their own litigation procedures, which allowed the participants to compare the differences.
It was a major event, judging by the commentary that followed in local media. Pei Xianding, a full-time member of the Judicial Committee of the Supreme People’s Court, said that the seminar had “helped to promote judicial exchanges and mutual learning”. Hong Kong’s Justice Secretary, Teresa Cheng, said that using the same case as the basis for discussion and study in a simulated court mode would help to “accelerate the construction of a business environment grounded in the rule of law in the Greater Bay Area”.
Judicial exchanges between the three jurisdictions have been ramping up. Key recent agreements have included those covering mutual recognition of qualifications, as well as guidelines on cross-border mediation.
Read more (in Chinese)
The new year has kicked off with a series of announcements about measures designed to attract more foreign investment to China. The latest, most interesting, is this announcement from Xinhua about foreign banks being encouraged to take part in underwriting local government bonds. It reports that some have already underwritten Guangdong provincial bonds.
This will be a key development to watch this year. As has been written here since the start of GBI in March last year, it is clear that the country sees the need to attract more international capital. The Foreign Investment Law went into effect on January 1 and, while skeptics have rightly spoken of the need to see how it is enforced, it is designed to attract and protect more foreign investment. More sincere steps are being taken to uphold intellectual property rights, and sectors of the economy are being opened wider to foreign investment. The participation of foreign banks in local government bonds will be a key measure of the effectiveness of these measures in the near term. Supposedly backed by the government, they should be the safest of bets on the Chinese economy. The nine GBA cities inside Guangdong should be among the safest of the safest.
Continue reading Foreign banks to underwrite local bonds