Chief Secretary for Administration Henry Tang delivers a speech at the briefing on the Overall Development Plan on Shenzhen-Hong Kong Cooperation on Modern Service Industries in Qianhai Area Monday. Provided by GIS

Officials from the city and neighboring Shenzhen aim to transform Qianhai into a world-class modern service industry zone by 2020.

Shenzhen plans to pour $5.9 billion into "Project Qianhai" to build up the area's infrastructure and establish a legal framework and woo services firms in Hong Kong, especially in the financial sector. Some 20 local firms signed cooperation agreements Monday.

The State Council approved the preliminary plan on August 26 to celebrate the 30th anniversary of the establishment of the Shenzhen Special Economic Zone.

"Since the adoption of the Qianhai concept, service and business communities in Hong Kong have shown great interest," said Hong Kong Chief Secretary Henry Tang.

Qianhai is located in the Shekou peninsula in western Shenzhen and east of the Pearl River Estuary. It covers an area of about 15 square kilometers.

The three-phase plan will last until 2020, with a target of transforming the area into an "international modern service industry cooperation zone with sophisticated infrastructure."

According to Wang Rong, party secretary of the CPC Shenzhen Municipal Committee, land reclamation is about to be completed. The cooperation zone will have a land area of 2.18 square kilometers.

The plan, positioning Qianhai as a prime zone for modern service industry cooperation between Guangdong and Hong Kong, gives priority to four pillar industries: finance, modern logistics, information services, and science and technology services.

According to the plan, customized policies and institutions favorable to modern service industries will be set up and put in place in Qianhai.

In finance, for example, to boost capital market cooperation between the two sides, the Qianhai Authority will facilitate eligible Hong Kong financial institutions to set up joint ventures in securities brokerage, investment consultancy and asset management.

Also, research is under way to form policies supporting Hong Kong insurance institutions to tap Qianhai, as well as lowering the market entry threshold for Hong Kong residents and institutions acting as insurance agents in the Qianhai area. In logistics, the plan aims to build the region into an international logistics hub, providing more convenience for Hong Kong shipping operators.

As to the legal framework build-up, Qianhai will leverage the legislative power of the Special Economic Zone, establishing a business environment adaptable to international laws and practices, said the plan.

The Central Government has empowered Qianhai district authority with independent management over project examination and approval in non-financial industries, a privilege enjoyed only by municipalities specifically designated in the state plan. As for the financial industry, the supervisory body can set up a special organization, in order to encourage innovative practices.

According to Fan Hengshan, director general of the Department of Regional Economy from the National Development and Reform Commission - the country's top economic planner - this practice is one of the first of its kind, with the purpose of streamlining the otherwise lengthy administrative procedures.

China Daily

(HK Edition 12/21/2010 page2)