- New cooperation zone to strengthen collaboration between Hong Kong, Shenzhen and the Pearl River Delta
- China-Hong Kong agreement makes it easier for Hong Kong enterprises to set up and run modern services businesses in the Qianhai Zone
The Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (Qianhai Zone) is to be developed as “South China’s Manhattan” with the intention of strengthening the collaboration between Hong Kong, Shenzhen and the Pearl River Delta, help high-end service industries enter the mainland market and increase the international use of Renminbi (RMB).
New regulations and laws have been created by the Government of Shenzhen specifically for the Qianhai Zone.
On 29 June 2012, Hong Kong and China reached agreement on a further enhancement of economic and trade co-operation and exchanges. This agreement lowers the eligibility requirements and access criteria for Hong Kong enterprises setting up and running modern services businesses in the Qianhai Zone, leading to a finance and services market with the lead of Hong Kong.
Highlights of the Regulations
- China further relaxes the market access conditions for 21 existing service sectors of Hong Kong on the basis of the commitments on liberalisation of trade in services under CEPA, and introduces liberalisation measures in the education services sector.
- The liberalisation measures of these 22 service sectors in Qianhai Zone may be subjected to specific shareholding requirement under CEPA Supplement IX.
- CEPA Supplement IX provides mutual recognition of professional qualification between real estate appraisers on the Mainland and general practice surveyors in Hong Kong, and between cost engineers on the Mainland and quantity surveyors in Hong Kong.
CEPA Supplement IX also provides deeper co-operation between the financial markets on the Mainland and in Hong Kong with the following measures:
- Supporting listing of Chinese enterprises in Hong Kong by improving the Mainland’s overseas listing requirements.
- Creating favourable conditions for Mainland enterprises, especially SMEs, to raise capital through listing in overseas market.
- Exploring ways to facilitate co-operation between futures markets.
- Facilitating Hong Kong’s long-term capital investing in the Mainland capital markets by lowering eligibility requirements for Hong Kong’s financial institutions to apply for Qualified Foreign Institutional Investor status.
- Supporting qualified Hong Kong financial institutions in setting up joint venture securities companies, fund management companies and futures companies on the Mainland.
The Government of Shenzhen has made regulations to facilitate the development of the Qianhai Zone including the setting up of a:
- Governing authority – for developing, constructing, running and managing the Qianhai Zone. As a first step, this authority should implement CEPA Supplement IX.
- Supervisory body – for monitoring and supervising the activities of the Qianhai Zone governing authority.
- Banking and other financial services supervisory body.
- Co-operation body for Shenzhen and Hong Kong in the Qianhai Zone.
- Globally recognised business registration system.
- System for administrative review, with focus on creating organizations for handling commercial disputes.
- There will be tax reform for the modern services industry in the Qianhai Zone (e.g., waiver of business tax, preferential corporate tax rate at 15 percent and discounted individual income tax).
- The government of Shenzhen is encouraged to cooperate with Hong Kong in relation to telecommunications, education, medical services and social welfare so as to provide a good working and living environment for the people in the Qianhai Zone.