Tag Archives: Reform

Pudong elevated to Shenzhen’s level

The central government has unveiled a new masterplan (known as “opinions”) for Shanghai’s Pudong district, which places it on the same level as Shenzhen. The difference between the two, according to an analysis in Shenzhen Daily, is that Pudong is now more focused on “opening”, while Shenzhen is more focused on “reform”.

There are many practical differences between the two, of course, with the most obvious being that Pudong is just a district within Shanghai, whereas Shenzhen is a city of 22 million, serving the entire Greater Bay Area. But most eye-catching, according to the SCMP, is that Pudong has been tasked with experimenting with the full convertibility of the Renminbi.

The SZNews analysis goes out of its way to emphasize that the two cities are not competing, but part of a “double forward” strategy for China, like the famous chess move.

More on SCMP and SZNews

Macau aims for ‘free’ cross-border cashflows

Macau is looking to establish a basis for totally free cross-border capital flows between the Special Administrative Region and the mainland, according to its finance chief. Secretary for Economy and Finance, Lei Wai Nong, speaking at a Greater Bay Area Finance Forum hosted by Wynn Palace last Friday (June 11) said the Macau government is striving to achieve this goal – without providing a timeframe – in order to “foster financial cooperation with the partnering regions” on the mainland.

Lei was likely referring to plans being discussed with neighboring Guangdong related to the Hengqin New Area, a special zone situated opposite Macau’s casino resorts in the Cotai district. Free capital flows between Macau and the mainland would provide “a solid financial foundation to assist various industries from both sides to gain ground,” Lei said.

“The Guangdong-Macao Intensive Cooperation Zone in Hengqin is a crucial gateway for Macau to integrate into the development of the GBA. President Xi Jinping asked Guangdong Province and Macau to robustly facilitate the construction of cooperation zones, carving out conditions for the development of emerging industries and furthering the city’s economic diversification,” Lei said.

More on Macau Daily Times

GBA part of new forex easing plan

The Greater Bay Area will be included in an official plan to further open China’s foreign-exchange controls, according to the the PBOC. Speaking at the 13th Lujiazui Forum in Shanghai, which started yesterday, Pan Gongsheng, the central bank’s deputy head, said both the QFLP and QDLP programs will be expanded in Shanghai, Hainan, and the GBA. 

The QFLP scheme allows foreign institutional investors to convert overseas capital into Chinese yuan-denominated funds that can be used to invest in the domestic private equity and venture capital markets. 

The QDLP program allows domestic fund managers to raise funds from qualified domestic institutional investors and set up trial funds for investment in overseas primary and secondary capital markets. 

More on Yicai

Beijing announces sweeping economic reforms

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.

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Greater Bay arbitration centers growing

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.

Continue reading Greater Bay arbitration centers growing

Shenzhen to keep investing, while ‘considering private participation’

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’

New Foreign Investment Law takes hold

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.

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Guangdong to deepen financial opening and innovation

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

Zhaoqing boosts SMEs with 10-point plan

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

Company supervision efficiency improves

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