China Approves Policies for the Qianhai Shenzhen-Hong Kong Modern Services Zone
Jul. 6 – China’s State Council released the “Official Reply on Policies Concerning the Development and Opening-up of Qianhai Shenzhen-Hong Kong Modern Services Cooperation Zone (guohan  No.58, hereinafter referred to as ‘Reply’)” on June 27.
The purpose of the Reply is to support Shenzhen’s Qianhai area in implementing various advanced pilot policies, and forge the area into the following:
- A zone for modern services with innovative systems and mechanisms;
- A modern services industry cluster;
- A pioneering pilot area for mainland-Hong Kong cooperation; and
- An area for spearheading industrial restructuring in the Pearl River Delta region.
According to the Reply, the government supports implementation of pilot policies pertaining to reforms and innovation in Qianhai’s financial sector, which would serve as an experimental and demonstrative window for the opening-up of China’s financial sector.
In this regard, some preferential policies in the financial sector include:
- Allowing the Qianhai area to explore the expansion of offshore RMB fund flow-back channels, and establish an innovative experimental zone for cross-border RMB business
- Supporting the granting of RMB loans for offshore projects by banking institutions established in Qianhai
- Under the CEPA framework, conducting studies on the granting of RMB loans by Hong Kong-based banking institutions for enterprises and projects established in Qianhai
- Supporting qualified enterprises and financial institutions registered in Qianhai to issue RMB bonds in Hong Kong within the quotas approved by the State Council to support the development of Qianhai
- Supporting the innovative development of foreign-invested equity investment funds, and actively exploring new modes of foreign exchange settlement of capital funds, investment and fund management
- Supporting the establishment of international or national management headquarters or business operation headquarters by Hong Kong and other onshore and offshore financial institutions
With regard to other policies, the Reply provides that:
- Qualifying enterprises based on preferential treatment and other catalogs to be formulated separately will be entitled to a reduced corporate income tax rate of 15 percent
- Explore the establishment of branches of Hong Kong arbitration institutions in Qianhai
Moreover, the Reply mentions that the cooperation between the mainland and Hong Kong regarding legal affairs, education, medical care and telecommunication should be strengthened.
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