Tag Archives: Qianhai

Qianhai – a new kind of experiment

The new special economic zone in Shenzhen, one of three designated by Beijing for the next stage of China’s Reform & Opening, has been slow getting going, but changes are being accelerated.

As far as special economic zones go, Qianhai is not meant to impress with its size. At just 18.04 sq km, the new zone in the western side of Shenzhen, facing the South China Sea, is relatively small, with not much room for future expansion – unless further reclamation work is done. But that is just fine for local and national officials, for now. What Qianhai is set to accomplish in the coming years, under the Greater Bay Area masterplan, is all about quality rather than quantity.

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Hong Kong as regional HQ: time to move?

For those who care to look, the Hong Kong protests are exposing flaws in many assumptions about Hong Kong’s competitiveness. This is not only a short-term concern, either. As revenues come under pressure, partly due to the protests, partly due to a slowing Chinese economy, operating costs are inevitably being looked at more carefully by companies based in “Asia’s World City”. It would be surprising if only a few were considering moving or scaling back their operations here.

The question is: Can other cities in the Greater Bay Area offer compelling alternatives?

The short answer would be: Yes. But do some homework first.

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Cambridge goes to Shenzhen

Shenzhen, is it often pointed out, doesn’t have any world-class universities. That may be about to change, as Cambridge University is exploring the establishment of a ”cooperative project” in Qianhai, Shenzhen’s special zone. 

The world-class university, which is well-known not only for its headquarters north of London, but for its curriculum that underpins millions of English-language high school exams worldwide, has sent its executive vice president to Shenzhen on what appears to be more than a fact-finding trip. 

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Qianhai’s office rent seen catching up fast

Qianhai has a lot of yet-to-be leased office space on the market, with vacancy rates at historic highs for a district in Shenzhen. Never mind, says international real estate consultancy Colliers, it will catch up fast and likely overtake the neighboring Houhai district.  

Thanks to policy support for the special economic zone, which is attracting a surge of investment, Colliers believes Qianhai will benefit from near-term and longer-term trends in the coming years. (Read our primer on Qianhai to understand more.) Subsidies are currently generous, making rents here less than 70% of what they are in other districts, while infrastructure is being put in place that will soon make the district easier to access from the rest of the city.   Continue reading Qianhai’s office rent seen catching up fast

HK investment ramps up in Qianhai

In the wake of the Qianhai Cooperative Forum 2019, which was held at the weekend, the city has released statistics showing how fast the special economic zone is ramping up investments and output.

Official data shows utilized foreign direct investment in Qianhai jumped 12.1% to $2.533 billion in the first six months. Hong Kong companies were the most aggressive, and now account for nearly 90% of the zone’s total utilized FDI of US22 billion. Their utilized FDI was 60% of Shenzhen’s and 20% of the entire province’s during the first half.

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Qianhai takes another bold step in forex reform

The hits keep coming from Qianhai, the special economic zone in Shenzhen that appears to be the spearhead of the next stage of major reform for the country.

The Shenzhen Foreign Exchange Bureau has issued detailed implementation guidelines for pilot reforms of foreign exchange in the zone, located in the Shekou district. These put forward a batch of initial trial policies that include allowing the use of forex earnings in domestic equity investment, a type of cross-border financing for local enterprises.

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Qianhai is China’s No. 1 Free Trade Zone

According to a new index ranking China’s Free Trade Zones, Shenzhen’s Qianhai is the country’s No. 1.

The Institutional innovation Index for China Pilot Free Trade Zones (2018-2019), released by Guangzhou’s Sun Yat-sen University, gave Qianhai a score of 86.26 points. It was followed by the Shanghai Pilot Free Trade Zone at No. 2, and Guangzhou’s Nansha at No. 3.

Qianhai scored No. 1 in “transformation of government functions,” “investment facilitation,” “trade facilitation” and “legal environment.” 

(If you need to understand the zones better, read our primer.)

Qianhai designated Integrated Bonded Area

Qianhai has become Shenzhen’s latest Integrated Bonded Area. Centered on Mawan Bay, it will be the fourth bonded area in Shenzhen after Futian, Shatoujiao, and Yantian Port, allowing duty-free goods to be reassembled and repackaged within the area for import and export. 

The Qianhai bonded area will focus on supply chain management and the development of supporting industries such as bonded financing and leasing, testing and recognition, R&D and exhibition. The government has set aside nearly three square kilometers for the bonded area. No fewer than five railway lines will run through here, and it will be an essential part of the Qianhai Shekou special economic zone. 

Read more in Chinese. 

Shenzhen office vacancies at 10-year high

Vacancies in the office market in Shenzhen hit a decade-high in the first half of 2019, burdened by a flood of new space entering the market and lingering fallout from a recent cleanup in the financial technology sector, reports Caixin Global. 

The vacancy rate for class-A space in the city now stands at 23.3%, according to Colliers International. Much of the new space is being built in Qianhai and the nearby Nanshan district. Qianhai’s vacancy rate is 65.7%. Which might explain our recent news item about Qianhai offering big rental subsidiesto Hong Kong companies registered there who have not yet settled in an office building. 

It would appear that the demand side of the market is not doing so well, either. The government’s crackdown last year on peer-to-peer lending platforms apparently led to 300,000 square meters of temporary vacancies for grade-A office space in Nanshan alone. Colliers is positive, however, that the challenge will be short-lived, as banks and other financial organizations will step into the gap. 

Read more. 

GBA Briefs: 19/6/2019

Zhaoqing Park: Zhaoqing’s Deqing district has allocated a 100-acre site for its first industrial park. The park will see a total investment of RMB800 million to build an industrial cluster focusing on electronics and electrical appliances. Read more. 

Qianhai incentives: Shenzhen’s Qianhai is offering rental rebates of up to 50%, capped at RMB5 million annually, to attract those companies that have registered in Qianhai but are not yet operating in the area. Read more. 

Healthy Gaming: Macau’s gaming industry is a pillar of the local economy and local taxation, but the sector should be kept in a state of “healthy development”, said Ho Iat Seng who made a formal announcement yesterday to run for Macau’s chief executive. Read more. 

Superman Gift: Hong Kong tycoon Li Ka-shing is donating RMB100 million to his hometown Shantou University to fund tuition for all undergraduate students for the class of 2022 up until 2027, making it China’s first university to waive tuition fees for its entire student body. Read more. 

PBOC HK Issue: The People’s Bank of China will issue central bank bills worth RMB30 billion in Hong Kong on June 26, with the aim to improve the yuan yield curve in the city. Read more.

Earthquake alert: Shenzhen will build an earthquake-alert system next year which will send out messages to residents through an app on mobile phones or computers. Read more.

New finance zone: Guangdong has issued a white paper to explore the establishment of a Guangdong-Hong Kong-Macau financial cooperation zone, which would trial cross-border finance, financial leasing, shipping and marine finance. Read more

HK GDP: Hong Kong’s GDP increased by 0.6% in real terms in the first quarter of 2019 over a year earlier, compared with the 1.2% increase in the fourth quarter of 2018. Read more

Huizhou lagging: According to Huizhou’s statistics bureau, average per capita disposable income reached RMB33,929 last year, with about 70% coming from monthly salary. The average salary rose 7% in real terms, slower than the average of the province. Read more