Page 92 - 2017 White Paper
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7 White Paper on the Business Environment in China
generating annual gross domestic product of around On December 13, 2014, both Xinhua and China Daily
US$25 billion in Qianhai by 2020 — plans that call for reported that at a State Council meeting the day before,
total investment of nearly 400 billion renminbi, or about three new pilot free trade zones, namely in Guangdong,
US$65 billion (Gough 2014). Fujian and Tianjin, will be launched “to test greater
opening-up” and “tap the economy’s huge potential to
Officials in Qianhai like to point out that President hedge against mounting downward pressure next year”.
Xi’s first trip outside Beijing after assuming leadership of The report said that “the State Council’s proposal can win
the Communist Party in late 2012 was to Shenzhen and the top legislature’s approval at the end of December at
Qianhai, where he spoke of national rejuvenation and the the earliest”. A statement issued after the meeting, stated
pursuit of what he has called the “Chinese dream”. “The that the three areas will take on “most of the reform
goal of Qianhai is to be a dream factory for the Chinese initiatives now being applied to the Shanghai pilot zone”
dream”, said He Zijun, deputy director of the Qianhai and will be built based on existing development parks,
Authority, which administers the zone (Gough 2014). with Xinhua speculating that these are likely going to
be the Qianhai Special Economic Zone in Shenzhen,
In January 2014, according to the New York Times, New Guangdong province, the Tianjin Binhai New Area and
York property developer Silverstein teamed up with a Pingtan Comprehensive Pilot Zone in Fujian (Gu 2014).
Chinese firm in a winning bid of 13.4 billion yuan for a plot
of land in the district. The developer acquired rights to a While the Shanghai FTZ still has far to go to satisfy
550,000-square-foot site, where it plans to build offices, its many critics, the increase of support from the central
retail outlets, service apartments and hotels covering a government and the small but significant reforms
total floor area of nearly five million square feet (Gough implemented in the FTZ indicate that the FTZ still has the
2014). potential to play a significant role in China’s economic
reform process as well as deliver concrete benefits to
In August 2014, the People’s Bank of China, the China foreign companies registered in the zone (Baccam 2014).
Banking Regulatory Commission, the China Securities
Regulatory Commission and the China Insurance Ultimately, the Shanghai Free Trade Zone poses
Regulatory Commission reached a consensus and put an important test for a possible China-U.S. bilateral
forward 26 policy measures in support of financial investment treaty, as Peking University professor Yiping
reform and innovation in Qianhai. For example, the China Huang writes for the East Asia Forum.
Securities Regulatory Commission agrees to allow the
Shenzhen Stock Exchange to establish a cross-border The next few years will be interesting for China’s bold
investment and financing platform for private equity experiments in free trade. Will the government slowly
products in Qianhai, allow qualified domestic and foreign ease away from some restrictions, as Shanghai Party
institutions and individuals to take part in investment chief Han Zheng predicts? Will the central government
transactions, and allow foreign enterprises to carry out continue to support the opening of other free trade
debt financing and equity financing on that platform. zones, such as the one Guangdong envisions for the Pearl
The central bank agrees to let the overseas parent River Delta? Will the reforms truly allow for market forces
or holding companies of companies in Qianhai issue to play a larger role in China’s financial markets, including
yuan denominated bonds in the domestic market and setting both the value of the RMB and interest rates? It
transfer the funds raised to offshore markets. Besides remains to be seen if China’s flirtation with free trade
supporting Qianhai in setting up financial leasing will migrate to the national stage, thereby completely
companies, the China Banking Regulatory Commission transforming how the world’s largest economy does
also supports existing trust companies to set up branches business (Tiezzi 2013).
in Qianhai and allows the Qianhai branches of mainland-
funded banks with offshore business license to obtain
an offshore business license. The China Insurance
Regulatory Commission also agreed to let Qianhai launch
the “Shenzhen-Hong Kong stock connect” pilot scheme,
starting with reinsurance services (Hong Kong Trade and
Development Council Research 2014).
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generating annual gross domestic product of around On December 13, 2014, both Xinhua and China Daily
US$25 billion in Qianhai by 2020 — plans that call for reported that at a State Council meeting the day before,
total investment of nearly 400 billion renminbi, or about three new pilot free trade zones, namely in Guangdong,
US$65 billion (Gough 2014). Fujian and Tianjin, will be launched “to test greater
opening-up” and “tap the economy’s huge potential to
Officials in Qianhai like to point out that President hedge against mounting downward pressure next year”.
Xi’s first trip outside Beijing after assuming leadership of The report said that “the State Council’s proposal can win
the Communist Party in late 2012 was to Shenzhen and the top legislature’s approval at the end of December at
Qianhai, where he spoke of national rejuvenation and the the earliest”. A statement issued after the meeting, stated
pursuit of what he has called the “Chinese dream”. “The that the three areas will take on “most of the reform
goal of Qianhai is to be a dream factory for the Chinese initiatives now being applied to the Shanghai pilot zone”
dream”, said He Zijun, deputy director of the Qianhai and will be built based on existing development parks,
Authority, which administers the zone (Gough 2014). with Xinhua speculating that these are likely going to
be the Qianhai Special Economic Zone in Shenzhen,
In January 2014, according to the New York Times, New Guangdong province, the Tianjin Binhai New Area and
York property developer Silverstein teamed up with a Pingtan Comprehensive Pilot Zone in Fujian (Gu 2014).
Chinese firm in a winning bid of 13.4 billion yuan for a plot
of land in the district. The developer acquired rights to a While the Shanghai FTZ still has far to go to satisfy
550,000-square-foot site, where it plans to build offices, its many critics, the increase of support from the central
retail outlets, service apartments and hotels covering a government and the small but significant reforms
total floor area of nearly five million square feet (Gough implemented in the FTZ indicate that the FTZ still has the
2014). potential to play a significant role in China’s economic
reform process as well as deliver concrete benefits to
In August 2014, the People’s Bank of China, the China foreign companies registered in the zone (Baccam 2014).
Banking Regulatory Commission, the China Securities
Regulatory Commission and the China Insurance Ultimately, the Shanghai Free Trade Zone poses
Regulatory Commission reached a consensus and put an important test for a possible China-U.S. bilateral
forward 26 policy measures in support of financial investment treaty, as Peking University professor Yiping
reform and innovation in Qianhai. For example, the China Huang writes for the East Asia Forum.
Securities Regulatory Commission agrees to allow the
Shenzhen Stock Exchange to establish a cross-border The next few years will be interesting for China’s bold
investment and financing platform for private equity experiments in free trade. Will the government slowly
products in Qianhai, allow qualified domestic and foreign ease away from some restrictions, as Shanghai Party
institutions and individuals to take part in investment chief Han Zheng predicts? Will the central government
transactions, and allow foreign enterprises to carry out continue to support the opening of other free trade
debt financing and equity financing on that platform. zones, such as the one Guangdong envisions for the Pearl
The central bank agrees to let the overseas parent River Delta? Will the reforms truly allow for market forces
or holding companies of companies in Qianhai issue to play a larger role in China’s financial markets, including
yuan denominated bonds in the domestic market and setting both the value of the RMB and interest rates? It
transfer the funds raised to offshore markets. Besides remains to be seen if China’s flirtation with free trade
supporting Qianhai in setting up financial leasing will migrate to the national stage, thereby completely
companies, the China Banking Regulatory Commission transforming how the world’s largest economy does
also supports existing trust companies to set up branches business (Tiezzi 2013).
in Qianhai and allows the Qianhai branches of mainland-
funded banks with offshore business license to obtain
an offshore business license. The China Insurance
Regulatory Commission also agreed to let Qianhai launch
the “Shenzhen-Hong Kong stock connect” pilot scheme,
starting with reinsurance services (Hong Kong Trade and
Development Council Research 2014).
92
