Qianhai: China’s Manhattan

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Dubbed “China’s Manhattan” – the
Qianhai development in Shenzhen is part of the Chinese mainland national strategy since
getting the nod from the National State Council in 2010. The 15-square-kilometre land is expected to
generate 150 billion yuan by 2020, transforming into a modern services centre, focusing on
finance, modern logistics, information services and technology and professional services. Closely watching how Qianhai unfolds is Hong
Kong, located just across the border and home to an economy more than 90 per cent powered by services companies. Hong Kong business leaders were offered a
rare glimpse of Qianhai, the new pilot commercial zone set up by Shenzhen authorities. The March
2013 business mission, organised by the HKTDC and InterCham offered first-hand information
from Qianhai policymakers and administrative officials This is a map for the PRD region. As you can
see, the yellow dot is Qianhai, which is situated in the heart of the PRD.
Here is the transportation advantage for Qianhai. As you can see, to the northwest, there is
the Shenzhen Baoan International Airport, and to the southeast, you can find the Hong
Kong International Airport. Under the 12th five-year plan, the government has approved the proposal to build a rail line between the two airports, the HK-SZ Western Express
Line, and Qianhai will become the only stopover in between Fifteen Hong Kong-based financial institutions including Hang Seng Bank and the Bank of East
Asia, have been given the green light to offer renminbi loans to companies in the experimental
zone. Qianhai will also offer tax incentives to make it easier for companies to establish
a presence there. Primarily, companies can enjoy a corporate-income-tax rate at 15 per cent, upon meeting the requirements by the Ministry of Finance. To do so, you must be newly registered in Qianhai. Secondly, the business operation should be in Qianhai. And thirdly, your company must be listed on the sector-classified preferential catalog
formulated by the MOF. If you can meet all the requirements, the tax cut can be approved
right away without depositing anything. Qianhai is also expected to serve as the test
ground for a fully convertible renminbi. Before, China has never made any area
as a pilot experimental zone for financial opening nor for cross-border Rmb investment.
It is also here that arbitration bodies from Hong Kong will be introduced. We will nurture
a talent pool, where professional individuals will enjoy tax incentives. Such benefits have
never been granted to any other areas or regions. The currency pool for the renminbi in Hong
Kong, according to Mr Tse, topped 1 trillion by the end of 2012, accounting for only
about 12 per cent of Hong Kong’s bank deposits. How to channel such a huge amount of money
back to the mainland remains a key question for both Hong Kong and Qianhai. There are many opportunities. For example,
the first batch is around 2 billion yuan, next we could expect it to be 3 billion or
even quickly growing to a dozen of billion. This means a big opportunity for Hong Kong. There are 1 million people in China, whose
asset is larger than 10 million yuan for each one of them. That is why wealth management
is a growing business. Hong Kong is a great wealth management centre, however there lacks a linkage on the Chinese mainland. But now, Qianhai could supplement to that role, to serve the domestic needs as well as the needs from outside. Hong Kong, in the regard, could
provide various financial products and services. International schools and Hong Kong-based
hospitals will also be allowed to set up branches in Qianhai. The international schools, the high-school level or below, will be able to set up shops
in Qianhai. So instead of the deli immigration of little school kids going across the border
from Shenzhen to Hong Kong every morning, and come back every afternoon. I am guessing
they will be able to go to a Hong Kong school in Qianhai and only will be one metro station
away. I was able to talk to one of Qianhai executives
one-on-one at the lunch. I learnt that some of policies in Qianhai, actually there are
some amount of bottling up to Beijing rather than everything coming down when it comes to policies. So this trip gives you an opportunity to make the whole Qianhai idea real.

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