The newly approved Guangdong Pilot Free Trade Zone will offer preferential policies for investment from the special administrative regions of Hong Kong and Macao, according to a top provincial official.
Zhu Xiaodan, governor of Guangdong province, said the FTZ will play a central role in facilitating economic and trade cooperation between the province and the neighboring special administrative regions.
“The FTZ will further open up to Hong Kong and Macao investors under the CEPA (Closer Economic Partnership Arrangement) framework,” Zhu said, adding that a draft development plan for the zone has been submitted to the State Council for approval.
Zhu said the zone will be launched officially once the draft plans are approved, but no timetable has yet been decided.
The zone, covering an area of more than 116.2 square kilometers, will include the district of Nansha in Guangzhou, Hengqin New Area in Zhuhai, and Qianhai and Shekou areas in Shenzhen.
Administrative committees have been established to oversee operations in the three areas.
According to Zhu, the Nansha area will focus on the development of manufacturing-related services, shipping and logistics, and advanced manufacturing.
Qianhai and Shekou will be developed into pilot areas for opening up the financial sector, and will also focus on technology and information services and modern financial services.
Hengqin will focus on sectors such as tourism, culture, science and education.
Although general policies will be put in place to govern foreign investment, the zone’s management will also issue specific measures to cover investment from Hong Kong and Macao in sectors such as finance, transport, trade services, culture and service sectors, according to the draft plan.
“We will integrate resources for international trade, finance and shipping services from Hong Kong and Macao, further open up the financial market and promote cross-border yuan settlement services,” Zhu said at a panel discussion at the annual session of the National People’s Congress in Beijing, without elaborating on specific measures for investment from Hong Kong and Macao.
“We have worked closely with relevant authorities, including the customs, banks and the inspection and quarantine departments to formulate support measures related to foreign investment and trade,” he said.
Chen Jianhua, mayor of Guangzhou, said the Nansha area will adopt the business model used in the China (Shanghai) Pilot Free Trade Zone, including a negative list policy, under which foreign investment will be allowed in all sectors except those that are specifically prohibited, and introduce a series of pilot programs, including tax rebates based on port departures, cross-border renminbi loans and offshore data services.
“We will build a business framework in line with international trade and investment practices,” Chen said, adding that Nansha will become an international shipping and logistics center to facilitate development of the FTZ.
In addition to the negative list, the FTZ will also introduce restrictions on domestic investment, according to Li Chunhong, a deputy to the National People’s Congress and director of the Guangdong Development and Reform Commission.
Guandong will become the first FTZ in China to operate a negative list for domestic investment, and will compile a directory of items where government approval and supervision are mandatory, according to Li.