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The rich potential of Shenzhen
Published: Sep 9 2010 9:47
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The country's celebration of the 30th anniversary of the Shenzhen Special Economic Zone (SEZ) has given Hong Kong a chance to evaluate the past and look ahead and see how the SEZ has affected the development of Hong Kong.

Shenzhen connects most intensively with Hong Kong among all SEZs. The establishment and development of Shenzhen are inseparable from Hong Kong. At the same time, Shenzhen also plays an essential role in helping Hong Kong maintain its strength following the handover.

In the past 30 years, since the mainland opened its doors, Hong Kong became the most convenient and direct window to the outside world. Compared with other countries in the socialist camp, China enjoyed some advantages. First, its central leaders, represented by Deng Xiaoping, carried out reform and opened up the country with strong motivation and determination. Also, capitalistic economic entities like Hong Kong, Macao and Taiwan are all located in the Greater China region.

Since the republic was founded, Hong Kong has been the mainland's main window on the economy and trading connecting the mainland to the rest of the world. Even when Western countries were rebuking and isolating China, Hong Kong continued to play that role. The establishment of the Shenzhen SEZ turned a piece of land that was adjacent to Hong Kong, of approximately the same land area, into a place that operates under special policies. It created a new space for capital, technology and resources to flow into the international market of Hong Kong. It has produced an excellent opportunity for Hong Kong as the city seeks transformation.

To Shenzhen, being adjacent to Hong Kong is one of its advantages, a huge batch of mainland professionals have flooded to Shenzhen. What the central government offers Shenzhen is not so much capital as a policy of "early and pilot implementation". These conditions have stimulated Shenzhen to become one of China's most advanced cities in a short period of time. In terms of infrastructure development and management, Shenzhen has made use of Hong Kong's experience. At the same time, Hong Kong has gained benefits which could not be attained elsewhere.

The development of Qianhai, a cooperative effort between Hong Kong and Shenzhen, is a new area that will evolve over the next 30 years. Shenzhen has invested 10 billion yuan in developing Qianhai, which has become a new economic hinterland for Hong Kong. Shenzhen is looking for a new exit, cooperating with Hong Kong can make use of the "express" brought about through Hong Kong-Guangdong co-operation and the CEPA. The central government approved the Qianhai development plan that formulated a new cooperation model between Hong Kong and regions on the mainland. According to reports, early and pilot implementation offered to Qianhai includes several preferential policies. Qianhai will follow Hong Kong's system of low taxation; individual income tax will decrease to below 20 percent from the highest 45 percent. In terms of currency, Renminbi will be allowed to exchange freely in the region. But it will take time to make it work. Hong Kong's arbitration bodies will be allowed to set up branches in Qianhai in the next 10 years. When disputes between the Qianhai enterprises and individuals arise, they can seek help from the mainland's judiciary organizations or Hong Kong's arbitration organizations. A specialized Civil and Commercial Court will be established in Qianhai. Juries may be invited from Hong Kong, Macao, Taiwan and overseas. The judicial environment will help boost investors' confidence in the region.

Qianhai will become an important base of cooperation between Hong Kong and Shenzhen in the future.

The author is a commentator of the Phoenix Satellite TV.

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