Jul. 19 – The new financial and modern services development zone in Qianhai, a Hong Kong-Shenzhen joint venture supported by the State Council, saw 37 firms sign contracts worth a total of RMB220 billion (US$34.54 billion) with officials from Qianhai in Hong Kong on Monday, according to the Shenzhen Daily.
Of the 37 firms, 12 were Hong Kong companies, 12 were foreign-funded companies, and were 13 domestic Chinese companies. According to reports, 15 of the companies are listed within the 2012 Fortune Global 500 list.
The Qianhai Zone was official approved by China’s State Council on June 29 with the aim of serving as an experimental business zone for better interaction between Mainland China and Hong Kong in the financial, logistics, and IT services sectors. It covers less than 20 square kilometers on the western side of Shenzhen, and is expected to achieve a GDP of RMB150 billion by 2020.
To date, 23 companies have completed registration formalities in Qianhai. The zone will next speed up environmental improvements and the construction of infrastructure facilities, international schools, and hospitals in order to create a more comfortable living environment for residents, officials said.
“There has been a lot of speculation regarding the new zone and it will be interesting to see how the national and provincial governments will decide on the type of industry and effective incentives to be granted to companies setting up in this area, taking into consideration the whole PRD future economic development,” comments Alberto Vettoretti, managing partner of Dezan Shira & Associates. “In fact, in Guangdong Province there are other areas under remodeling to extract the ‘next wave’ of FDI, such as Hengqing Island near Zhuhai and Nansha Port near Guangzhou. So if they give certain incentives to the Qianhai Zone, then I think these would have to somehow extend to the others too. Historically, when a new policy is announced, it also tends to favor the large international players and Fortune 500 companies so the threshold will be set quite high for entrants, which would probably make the new zone not a very SME-friendly place. At the moment, [the Qianhai Zone] remains a piece of land with virtually no infrastructure.”
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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