Page 70 - 2016_WhitePaper_web
P. 70
6 White Paper on the Business Environment in China
In January 2014, according to the New York Times, New Ultimately, the Shanghai Free Trade Zone poses an
York property developer Silverstein teamed up with a Chinese important test for a possible China-U.S. bilateral investment
firm in a winning bid of 13.4 billion yuan for a plot of land in treaty, as Peking University professor Yiping Huang writes for
the district. The developer acquired rights to a 550,000-square- the East Asia Forum.
foot site, where it plans to build offices, retail outlets, service
apartments and hotels covering a total floor area of nearly five The next few years will be interesting for China’s bold exper-
million square feet. 14 iments in free trade. Will the government slowly ease away from
some restrictions, as Shanghai Party chief Han Zheng predicts?
In August 2014, the People’s Bank of China, the China Will the central government continue to support the opening
Banking Regulatory Commission, the China Securities Regu- of other free trade zones, such as the one Guangdong envisions
latory Commission and the China Insurance Regulatory Com- for the Pearl River Delta? Will the reforms truly allow for mar-
mission reached a consensus and put forward 26 policy mea- ket forces to play a larger role in China’s financial markets, in-
sures in support of financial reform and innovation in Qianhai. cluding setting both the value of the RMB and interest rates?
For example, the China Securities Regulatory Commission It remains to be seen if China’s flirtation with free trade will
agrees to allow the Shenzhen Stock Exchange to establish a migrate to the national stage, thereby completely transforming
cross-border investment and financing platform for private eq- how the world’s largest economy does business.9
uity products in Qianhai, allow qualified domestic and foreign
institutions and individuals to take part in investment transac-
tions, and allow foreign enterprises to carry out debt financing
and equity financing on that platform. The central bank agrees
to let the overseas parent or holding companies of companies in
Qianhai issue yuan denominated bonds in the domestic mar-
ket and transfer the funds raised to offshore markets. Besides
supporting Qianhai in setting up financial leasing companies,
the China Banking Regulatory Commission also supports ex-
isting trust companies to set up branches in Qianhai and allows
the Qianhai branches of mainland-funded banks with offshore
business license to obtain an offshore business license. The Chi-
na Insurance Regulatory Commission also agreed to let Qian-
hai 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 down-
ward pressure next year.” The report said that “the State Coun-
cil’s proposal can win the top legislature’s approval at the end
of December at the earliest.” A statement issued after the meet-
ing, 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 Tian-
jin 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 government and
the small but significant reforms implemented in the FTZ indi-
cate that the FTZ still has the potential to play a significant role
in China’s economic reform process as well as deliver concrete
benefits to foreign companies registered in the zone.2
70
In January 2014, according to the New York Times, New Ultimately, the Shanghai Free Trade Zone poses an
York property developer Silverstein teamed up with a Chinese important test for a possible China-U.S. bilateral investment
firm in a winning bid of 13.4 billion yuan for a plot of land in treaty, as Peking University professor Yiping Huang writes for
the district. The developer acquired rights to a 550,000-square- the East Asia Forum.
foot site, where it plans to build offices, retail outlets, service
apartments and hotels covering a total floor area of nearly five The next few years will be interesting for China’s bold exper-
million square feet. 14 iments in free trade. Will the government slowly ease away from
some restrictions, as Shanghai Party chief Han Zheng predicts?
In August 2014, the People’s Bank of China, the China Will the central government continue to support the opening
Banking Regulatory Commission, the China Securities Regu- of other free trade zones, such as the one Guangdong envisions
latory Commission and the China Insurance Regulatory Com- for the Pearl River Delta? Will the reforms truly allow for mar-
mission reached a consensus and put forward 26 policy mea- ket forces to play a larger role in China’s financial markets, in-
sures in support of financial reform and innovation in Qianhai. cluding setting both the value of the RMB and interest rates?
For example, the China Securities Regulatory Commission It remains to be seen if China’s flirtation with free trade will
agrees to allow the Shenzhen Stock Exchange to establish a migrate to the national stage, thereby completely transforming
cross-border investment and financing platform for private eq- how the world’s largest economy does business.9
uity products in Qianhai, allow qualified domestic and foreign
institutions and individuals to take part in investment transac-
tions, and allow foreign enterprises to carry out debt financing
and equity financing on that platform. The central bank agrees
to let the overseas parent or holding companies of companies in
Qianhai issue yuan denominated bonds in the domestic mar-
ket and transfer the funds raised to offshore markets. Besides
supporting Qianhai in setting up financial leasing companies,
the China Banking Regulatory Commission also supports ex-
isting trust companies to set up branches in Qianhai and allows
the Qianhai branches of mainland-funded banks with offshore
business license to obtain an offshore business license. The Chi-
na Insurance Regulatory Commission also agreed to let Qian-
hai 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 down-
ward pressure next year.” The report said that “the State Coun-
cil’s proposal can win the top legislature’s approval at the end
of December at the earliest.” A statement issued after the meet-
ing, 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 Tian-
jin 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 government and
the small but significant reforms implemented in the FTZ indi-
cate that the FTZ still has the potential to play a significant role
in China’s economic reform process as well as deliver concrete
benefits to foreign companies registered in the zone.2
70
