New Financial Service Hub in Qianhai Bay Economic Zone Initiated
China is planning to create another financial services hub in the western part of Shenzhen near the Hong Kong border along the Qianhai Bay economic zone. The planned new hub will offer low taxes, better legal regime and anti corruption vigilance enjoyed by the former British colony Hong Kong.
The proposed project will bring in fresh business opportunities and boost its position as a financial window to global markets. Shenzhen’s ambition of becoming a global financial power house hits a brick wall as China is still cautious of reform and still needs to overcome its fear of freeing certain markets from government control.
Qianhai Authority head Cao Hailei, who is overlooking the project said that the structures of the two governments is very different. While the city officials gave up on the idea of having an independent anti graft body that Hong Kong enjoys, Shenzhen has to settle on a hybrid version that combines that fixture of Hong Kong and the mainland systems.
And as Chinese president Hu Jintao is set to visit Hong Kong to join in the anniversary of Hong Kong’s return to the mainland and swearing in a new administration, several officials will be expecting him to announce preferential tax rates and incentives for the Qianhai Bay Zone. So far Beijing had already announced a series of measures for Hong Kong That allow joint ventures among the stock exchanges in Shanghai, Hong Kong and Shenzhen and by allowing Hong Kong financial firms to create consumers arms in Guangdong and Shenzhen. China has also been expanding steadily the role of Hong Kong play of internationalizing the yuan, in hopes of that one day it will be a global currency that will build up the Chinese financial markets.