SHENZHEN, May 22 – The local government has proposed a plan to expand its special economic zone (SEZ) to encompass the whole city as a way to boost its competitiveness during the downturn.

If the proposal pushes through, the Bao’an and Longgang districts will become part of the SEZ thus growing the area from 395.81 square kilometers to over 1,900 square kilometers.

Shenzhen was one of the first and most successful economic zones to set-up in the country during economic reforms in the 1970s along with Zhuhai, Shantou and Xiamen.

“Legislators are working on the proposal to expand the scope of Shenzhen SEZ to the whole city, but it needs the approval of the State Council,” an official with the legislative affairs office of the Shenzhen Municipal People’s Congress, who wanted to speak anonymously, told China Daily.

Just this month, Beijing added Shenzhen to the list of areas to begin pilot comprehensive reforms. The expansion plans comes at a time when the local government needs to develop commercial facilities and some businesses have been strapped for land to expand operations. If the whole city is declared a SEZ that would mean the removal of policy and legal differences inside and outside the area.

Linus Yip, strategist at Hong Kong-based First Shanghai Securities, says Shenzhen expansion will benefit business in the Pearl River Delta region. It would be no surprise if Shenzhen were to expand further and combine with Hong Kong. “The two cities are, at the moment, quite closely correlated in terms of economic activities, and it will be irresistible for them to merge,” Yip added.