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5 White Paper on the Business Environment in China
yet received approval, though a number of applications were
subject to ongoing review, including zones in Guangdong and
Tianjin.7
By late June 2014, the overall plan for the proposed Guang-
dong free trade zone was back on track, having undergone
two rounds of consultation with the relevant ministries and
commissions. e proposed Guangdong FTZ will cover four
areas, namely, the Nansha New Area Bonded Zone, Qianhai
New Area, Hengqin New Area and Guangzhou Baiyun Air-
port Comprehensive Bonded Zone.6
Qianhai in Shenzhen is one of more than 10 newly created
or proposed special zones. Six years from now, the New York
Times reports that Shenzhen o cials envision, Qianhai will
be a thriving, international nance district in Shenzhen to
rival Manhattan, the city of London or Hong Kong, with
a working population of 650,000 people generating annual
gross domestic product of around US$25 billion in Qianhai
by 2020 — plans that call for total investment of nearly 400
billion renminbi, or about US$65 billion.14
O cials in Qianhai like to point out that President Xi’s
rst trip outside Beijing after assuming leadership of the
Communist Party in late 2012 was to Shenzhen and Qianhai,
where he spoke of national rejuvenation and the pursuit of
what he has called the “Chinese dream.” “ e goal of Qian-
hai is to be a dream factory for the Chinese dream,” said He
Zijun, deputy director of the Qianhai Authority, which ad-
ministers the zone.14
In January 2014, according to the New York Times,
New York property developer Silverstein teamed up with
a Chinese rm in a winning bid of 13.4 billion yuan for a
plot of land in the district. e developer acquired rights to a
550,000-square-foot site, where it plans to build o ces, retail the East Asia Forum.
outlets, service apartments and hotels covering a total oor
area of nearly ve million square feet. 14
In August 2014, the People’s Bank of China, the China
Banking Regulatory Commission, the China Securities Reg-
ulatory Commission and the China Insurance Regulatory
Commission reached a consensus and put forward 26 policy
measures in support of nancial reform and innovation in
Qianhai. For example, the China Securities Regulatory Com-
mission agrees to allow the Shenzhen Stock Exchange to es-
tablish a cross-border investment and nancing platform for
private equity products in Qianhai, allow quali ed domestic
and foreign institutions and individuals to take part in in-
vestment transactions, and allow foreign enterprises to carry
out debt nancing and equity nancing on that platform.
e central bank agrees to let the overseas parent or holding
companies of companies in Qianhai issue yuan denominated
bonds in the domestic market and transfer the funds raised
to o shore markets. Besides supporting Qianhai in setting
up nancial leasing companies, the China Banking Regula-
62
tory Commission also supports existing trust companies to
set up branches in Qianhai and allows the Qianhai branches
of mainland-funded banks with o shore business license to
obtain an o shore business license. e China Insurance
Regulatory Commission also agreed to let Qianhai launch the
“Shenzhen-Hong Kong stock connect” pilot scheme, starting
with reinsurance services.8
On December 13, 2014, both Xinhua and China Daily
reported that at a State Council meeting the day before, three
new pilot free trade zones, namely in Guangdong, Fujian and
Tianjin, will be launched “to test greater opening-up” and
“tap the economy’s huge potential to hedge against mounting
downward pressure next year.” e report said that “the State
Council’s proposal can win the top legislature’s approval at
the end of December at the earliest.” A statement issued after
the meeting, stated that the three areas will take on “most
of the reform initiatives now being applied to the Shanghai
pilot zone” and will be built based on existing development
parks, with Xinhua speculating that these are likely going
to be the Qianhai Special Economic Zone in Shenzhen,
Guangdong province, the Tianjin Binhai New Area and
Pingtan Comprehensive Pilot Zone in Fujian.19
While the Shanghai FTZ still has far to go to satisfy its
many critics, the increase of support from the central govern-
ment and the small but signi cant reforms implemented in
the FTZ indicate that the FTZ still has the potential to play
a signi cant role in China’s economic reform process as well
as deliver concrete bene ts to foreign companies registered in
the zone.2
Ultimately, the Shanghai Free Trade Zone poses an
important test for a possible China-U.S. bilateral investment
treaty, as Peking University professor Yiping Huang writes for
e next few years will be interesting for China’s bold ex-
periments in free trade. Will the government slowly ease away
from some restrictions, as Shanghai Party chief Han Zheng
predicts? Will the central government continue to support the
opening of other free trade zones, such as the one Guangdong
envisions for the Pearl River Delta? Will the reforms truly al-
low for market forces to play a larger role in China’s nancial
markets, including setting both the value of the RMB and
interest rates? It remains to be seen if China’s irtation with
free trade will migrate to the national stage, thereby com-
pletely transforming how the world’s largest economy does
business.9