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 catch up.

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. 

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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 →