Table of Contents
What is Qianhai?
Strategic position and the advantage of close proximity to Hong Kong
Special Authority and innovative support mechanisms
Special policies and their advantages
The Qianhai Bay Bonded Port Area
Port supervision and Customs and Clearance Measures of the Qianhai Bay Bonded Port Area
Qianhai legal environment and the Qianhai anti-corruption bureau
Qianhai Talent Trial Zone and the Qianhai Youth Entrepreneur Innovation Hub
Cooperation between Shenzhen and Hong Kong and collaboration with chambers in Hong Kong
What is Qianhai?
Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (前海深港现代服务业合作区), also known as Qianhai New District or simply Qianhai, is a commercial development area in Shenzhen.
On August 26, 2010, the State Council approved the overall development plan for the Shenzhen-Hong Kong Modern Service Industry Cooperation Zone with the purpose to build in the district of Qianhai in Shenzhen, a new area which can lead the development in Shenzhen and the Pearl River for the next 30 years.
According to plans made by the Qianhai administration, as the pilot district for cooperation between mainland China and Hong Kong and innovation in the service industry, Qianhai undertakes four functions:
An innovation area for modern service industry sectors;
A cluster area for the development of modern services;
A pilot area for close cooperation between the Mainland and Hong Kong;
A leading area for industry upgrades in the Pearl River Delta.
The Qianhai Cooperation Zone is also the only platform supported by the government to boost the cooperation between Shenzhen and Hong Kong in modern service industry.
Moreover, it enjoys preferential policies and strategic advantages in reform and opening-up as it takes on vital role in carrying out three major national development plans including the One Belt and One Road strategy and Pilot Free Trade Zones.
Strategic position and the advantage of close proximity to Hong Kong
Qianhai is a district of Shenzhen city, and it is situated in the Pearl River Delta. Enjoying an important strategic location in Guangdong Province, Qianhai, more than other places in China, can offer outstanding transportation advantages.
With the completion of railways and roads by 2020, Qianhai will be within a one-hour commuting radius of the Pearl River Delta and within a 30-minute commuting radius of Hong Kong.
The main arteries of traffic in the region, including the Shenzhen-Zhongshan corridor, Shenzhen Western Port, Shenzhen North Station and Guangzhou-Shenzhen Yanjiang Highway all pass through Qianhai, and the Shenzhen and Hong Kong airports are both very close to Qianhai.
Furthermore, Qianhai is part of Shenzhen, which is currently one of the most active cities in the Pearl River Delta and mainland China for economic development. In fact, Shenzhen’s total aggregate economic output ranks in the first tier among cities nationwide.
Among the major Chinese cities, Shenzhen also boasts the highest totals of GDP per capita, foreign export volume, number of patent applications and number of patent ownerships per capita. Its robust industrial base provides a large number of business partners and enormous market opportunities for corporations that decide to invest in Qianhai.
Finally, Qianhai is set to strengthen and solidify the partnership between Hong Kong and Shenzhen inseparable once and for all. Thanks to its involvement and considerable weight in this project, Hong Kong will support Qianhai in the implementation of the best business practices and standards in order to create its same fair, transparent, efficient and clean business environment in Qianhai.
On the other hand, Qianhai, within the partnership framework between Guangdong Province and Hong Kong, will help industries from both Guangdong and Hong Kong to complement each other.
Special Authority and innovative support mechanisms
In order to replicate the Hong Kong business model in mainland China and create a “well-regulated, transparent and reliable spot commodities trading venue on the Mainland backed by physical delivery and a warehouse system to support the Mainland’s real economy”, Beijing has guaranteed to Qianhai an extraordinary organizational and decision-making autonomy ever seen in China.
For instance, the Authority of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone is China’s first statutory institution, and at the same time, it is the first innovative management model of statutory bodies for China.
It is a municipal administrative authority with independent planning status to approve non-financial industrial projects, and based on the principles of full authorization and close operation, the Authority can provides one-stop service and create its own independent service management institution.
Furthermore, the central government has established a new administrative system in order to coordinate the different state-level authorities, but delegating the development of Qianhai to local governments for a faster and better development of Qianhai.
More specifically, a commission of the State Council, as top state level authority, control the Qianhai Development and Construction Inter-ministerial Departmental Joint Meeting Mechanism.
In this mechanism, the Guangdong Provincial Government, Hong Kong SAR Government and the Shenzhen Municipal Government are jointly delegated to support the Qianhai state policy platform formation by actively issuing policies and implementing procedures.
Another very important administrative body is the Qianhai Cooperation Zone Advisory Committee.
The Committee comprises well-known and influential figures from key industries from the mainland China and Hong Kong. Among the main functions of the Advisory Committee there are those of providing advisory opinions on relevant policies for the Qianhai’s development and coordinating the Qianhai development and construction inter-ministerial joint conference system.
Finally, there is the joint meeting mechanism of the Qianhai Bay Bonded Port Area, which is composed of 15 port units, government departments, enterprises and it is led by the Authority of Qianhai.
Special policies and their advantages
As a modern service industry cooperation zone, Qianhai's administration has planned to focus on finance, modern logistics, information services, technology services, and other professional services.
For example, in the financial sector, the Qianhai administration plans to promote innovation and partnership within the financial industry by relaxing currency flows between Qianhai and Hong Kong, reinforcing Hong Kong's position as an offshore RMB settlement center.
This initiative is meant to spearhead the internationalization of Shenzhen's capital market, as well as strengthen the partnership between securities markets in Shenzhen and Hong Kong. Qianhai's financial services will aim to complement that of Hong Kong's, in a conscious effort to avoid direct competition and create a win-win situation.
More specifically, Hong Kong banks will be allowed to extend commercial RMB loans to Qianhai-based onshore mainland entities. The People's Bank of China has also indicated that such loans will for the first time not be subject to the benchmark rates set by the central bank for all other loans in the rest of China.
The Qianhai Equity Trading Centre will provide loans to Qianhai enterprises by launching the RMB-denominated wealth management products (WMPs) on the Hong Kong capital market.
However, on June 2012, the State Council approved the following policies:
Financial Policies:
Qianhai will experiment with the expansion of offshore RMB fund flow-back channels. Qianhai will support the development of Hong Kong as an offshore RMB settlement center and will establish a cross-border RMB innovation zone in order to facilitate the development of RMB financial services.
Qianhai will support the issuance of RMB loans from local banking institutions to international projects, and from Hong Kong-based banking institutions to Qianhai projects under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).
Qianhai will be supported in its efforts to establish an equity investment parent fund in Qianhai.
Hasten the internationalization of Qianhai's financial market by opening up to Hong Kong market under the stipulations of CEPA.
Qianhai supports the development of innovative financial instruments, and financial products that support the development of the real economy.
Hong Kong and international banking institutions will be encouraged to establish their headquarters in Qianhai in order to quicken to pace of the internationalization of Qianhai's financial industry.
Qianhai’s financial reform and innovation are supported to build an experimental and exemplary zone that serves as a model for our financial industry as it opens up to the international community. Qianhai is being allowed to explore and expand its channels for the flow of RMB from abroad. This support for developing offshore RMB business in Hong Kong is useful to create an unprecedented cross-border RMB business zone. The goal is to pave a new path beyond the region on capital matters, and to promote the establishment of a new management approach for exchange controls.
Taxation Policies:
Eligible companies such as advanced high-tech companies or innovative services companies which will be registered in Qianhai are subject to a 15% preferential corporate income tax rate.
Eligible professionals such as high-skilled professionals or workers who are employed in Qianhai are exempt from personal income tax.
Legal Policies:
Qianhai will support Hong Kong arbitration agencies' establishment of affiliated agencies in Qianhai.
Qianhai will support the joint operation of mainland and Hong Kong law firms under CEPA and its supplementary agreements.
Technology and Other Professional Services:
The priority of Qianhai is that of developing innovative technologies, creative design services, but also modern and innovative professional services, in order to provide the companies established in Qianhai such as manufacturers, with new technologies and other professional services to support their reforming efforts and facilitate a smoother transition. Corporations that have passed an evaluation standard for technically advanced services can enjoy a corporate income tax rate of 15%. In addition, employee education and training expenses that do not exceed 8% of the corporation’s total salary can be deducted pre-tax.
Information Services:
Qianhai administration will promote the development of software and information technology services, as well as facilitate the cooperation between mainland and Hong Kong telecom operators.
Human Resource Policies:
Qianhai's human resources services and management mechanism will be innovated and relevant policies and measures will be formulated to attract professional and international workforce, including but not limited to professionals from Hong Kong, Macau and Taiwan, as well as Chinese citizens who are currently working or studying abroad or those who have returned to China.
Professionals with certification from Hong Kong will be permitted to provide professional services, the boundary of which is confined to Qianhai and to the enterprises and residents of Qianhai.
Always qualified professionals from Hong Kong with the certificates of Certified Public Accountant of China are permitted to serve as partners of mainland Chinese accounting firms. The pilot trial procedures will be formulated by Shenzhen and will be implemented in Qianhai upon the approval of the Ministry of Finance.
Education and Health Care Policies:
Education service providers from Hong Kong are allowed to set up international schools invested by Hong Kong investors in Qianhai upon approval.
Health care service providers from Hong Kong are permitted to establish hospitals invested by Hong Kong investors in Qianhai upon approval.
Telecommunications Policies:
Hong Kong and Macau telecom operators are permitted to establish telecom joint ventures with mainland Chinese operators in Qianhai under the stipulations of CEPA.
Qianhai will establish a dedicated telecommunications channel in order to provide a better and faster channel for telecom businesses as well as other firms in Qianhai.
Modern Logistics Policies:
Qianhai has already implemented some of its preferential policies in order to effectively allow logistics providers to offer improved and more flexible services across mainland China and globally. Modern logistics corporations that are registered in Qianhai and meet specific conditions can receive different business tax benefits. For instance, the income that insurance companies registered in Shenzhen receive from providing international shipping insurance services to corporations registered in Qianhai is exempt from some taxes.
Qianhai Bay Free Trade Port Zone:
The Qianhai Bay Free Trade Port Zone is one of the most important and vital components of Qianhai Cooperation Zone. The Qianhai FTPZ include the construction of 7 warehouses with a total area of 400,000m² already completed, among which 12,000 m² for refrigerated bonded warehouses.
The Qianhai Bay Bonded Port Area
On October 18, 2008, the State Council approved the establishment of the Qianhai Bay Bonded Port Area which is the prime area for promotion and critical functional zone of the Shenzhen-Hong Kong Cooperation Zone of Qianhai.
The area measures measuring 3.71 square kilometres and the purse seine area in its first phase measured 1.17 square kilometres.
The area comprised a harbour district and parks, with three hundred thousand-tonnage berths in the harbour district, integrating operations with the western harbour district of Shenzhen City, and seven modern warehouses have been built in the parks with an area for a structure measuring 400,000 square metres, of which the cold storage area is 12,000 square metres.
Dealing with the main trading activities related to distribution, transfer, international purchasing, insurance, agency, inspection, maintenance and shipping, the Qianhai Bay Bonded Port Area implemented precedent-setting policies superior to those of other special economic zones, such as carrying out special fiscal and taxation policies, exploring pilot cross-border loans and building cross-border RMB business innovation pilot areas.
It enjoys the supervision policies of special revenue, foreign currency and trade facilitation of a bonded port area, and also benefits from trial policies in finance and taxation as well as the finance and talent of the Qianhai cooperation area.
The Qianhai Bay Bonded Port Area has established an enterprise credit system to motivate trustworthy enterprises and built a logistics public information service platform to achieve paperless customs clearance. On-line clearance of goods will maximize convenience for enterprises in the port area.
Electronic filing management is conducted for import and export cargo between bonded port area and overseas destinations so that cargo in the area can be moved freely. Bonded supervision is applied to cargo transited between other bonded areas.
Tax and foreign exchange policies have been applied to bonded zones, export processing zones and bonded logistics parks. Integration linkages have been achieved in bonded zones and ports.
Port supervision and Customs and Clearance Measures of the Qianhai Bay Bonded Port Area
According to the Overall Development Plan for the Qianhai Area, approved by the State Council, the Qianhai Bonded Port Area, can implement current international practices or policy and institutional innovation in special customs supervision areas in order to be more competitive and offer the best services on the international market.
The Customs, Inspection and Quarantine, and other port inspection units currently use more convenient and advanced customs clearance management models, including loosening first-line restrictions so that cargo in the area can be moved freely, rebating taxes upon the entry into the area, and electronic filing of import and export cargo between bonded port area and overseas destinations.
Inspection and quarantine departments can conduct overseas cargo quarantine instead of inspection upon entry into the free trade port zone as currently required.
The zone and port integrated operations include:
An Integrated management system between Qianhai Bay Bonded Port Area and Shenzhen western ports. Instead of the traditional transit mode, a direct allocation is used for the flow of goods between the two sides;
A cross-border customs clearance to make faster the flow of goods and other transit procedures between the bonded port areas of Huangang, Shenzhen Bay, and other first-line ports free of sealing.
The classification management mode for innovation of the Bonded Port Area allows some high-credit companies to discharge goods into warehouses and then go through customs declaration procedures, conducting warehousing inspection on relevant goods, on the basis of the enterprise clearance credit positions in the in-and-out zone.
In addition, the Bonded Port Area provides customized services for enterprises.
Qianhai legal environment and the Qianhai anti-corruption bureau
In order to attract investments from the best international firms and enterprises, Qianhai is committed in the creation of a safe and fair business environment supported by a legal system based on that of Hong Kong. By introducing international guidelines and importing laws and regulations of Hong Kong, Qianhai will implement a legal system able to support the creation and development of the most modern service industry.
The judicial system and its mechanism of resolution disputes will be managed by three organs, the Shenzhen Court of International Arbitration, the Qianhai Tribunal, and the Qianhai Anti-Corruption Bureau.
Established on May 2013, the Qianhai Anti-Corruption Bureau (QACB) is a professional supervisory organization to implement the most efficient anti-corruption supervision methods and mechanisms.
The Bureau is under the direct under the direct supervision of the Shenzhen Municipal Committee and the Shenzhen Municipal Government, and it has an establishment of 17 staff authorized from the Municipal Commission for Discipline Inspection and the Municipal Supervision Bureau respectively.
Qianhai Talent Trial Zone and the Qianhai Youth Entrepreneur Innovation Hub
The Overall Development Plan of Qianhai expressly stated that Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone is aimed at creating an accommodating environment for talents.
For this purpose, the Qianhai Shenzhen-Hong Kong Special Talent Zone was established in June 2011.
The Qianhai Talent Service Center is a center within the Talent Zone which carries out three main functions:
Implement the Qianhai’s new talent mechanism and political innovations;
a platform for talent services;
a platform for the communication and exchange of information.
Always in order to attract and retain qualified workforce, the Qianhai’s administration is establishing an internationalized education system, as well as a Hong Kong-standard health care system.
All Qianhai buildings will meet international environmental standards, and the energy consumption of buildings will be closely monitored and controlled. The Qianhai administration already planned 150 million yuan investment in reforestation, and investments in clean energy, water and waste recycling as well as sustainable urban management.
The Qianhai Youth Entrepreneur Innovation Hub is an area that will become a community dedicated to the facilitation of innovation in young entrepreneurs, providing them with sources of venture capital, the advantage of starting up in one of the most active economies in China, and the opportunity to network with companies as well as like-minded individuals from abroad, particularly Hong Kong youths.
The cost of research and startup in the Qianhai Youth Hub is partially subsidised.
The prioritised industries in this area are consistent with Qianhai's overall blueprint, including innovative technology, information technology, modern logistics, and cultural and artistic innovation.
The development of professional services such as finance, accounting, and law, as well as computer science, e-commerce, statistical analysis, animation, new media, 3-D printing, design, virtual reality, and clean energy are strongly supported by the Qianhai administration.
The Hub will have facilities that help youth entrepreneurs obtain funds from venture capital, public funds, and subsidies from the Qianhai administration, providing them with the resources to either initiate an idea or continue developing their innovation.
In addition, the Qianhai Youth Hub is situated beside the Qianhai Enterprise Dream Park, giving the youth entrepreneurs a chance to network with companies, offers for careers, and venture capital. In addition to a lab area with facilities such as recording studios and 3-D printing labs, participants in the Qianhai Youth Hub will have access to the facilities in most public labs for free.
There is an instructional building where professors and professionals give seminars, career advice, or provide professional guidance to youth entrepreneurs, and an exhibition hall for the participants' work and ideas. International and Hong Kong youth participation in this hub is strongly supported by the Qianhai administration. This community will be managed by the Qianhai administration, the Hong Kong Federation of Youths, and the Shenzhen Youth Federation. This project will be completed by the end of 2014.
Cooperation between Shenzhen and Hong Kong and collaboration with chambers in Hong Kong
On 25 November 2013, the Authority of Qianhai and the Hong Kong Science and Technology Parks (HKSTP) officially signed the “Cooperative Agreement between the Authority of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone of Shenzhen and the Hong Kong Science and Technology Parks Corporation” to enhance communication and cooperation on the technology front between Qianhai and Hong Kong.
The HKSTPC is a statutory body set up by the Hong Kong SAR Government, and it monitors Hong Kong Science Park, InnoCentre, and three industrial estates located in Tai Po, Yuen Long and Tseung Kwan O.
It is also a public technical platform with an IC Design Centre, Solar Energy Technology Support Centre, Material Analysis Laboratory and a Biotech Support Centre.
It focuses on fields such as telecommunication, green energy, electronics, biotechnology, precision engineering and related functions such as technical support, professional services and science and technology business incubation.
Another crucial agreement is that signed in March 2014 between the Authority of Qianhai and the Hong Kong General Chamber of Commerce (HKGCC), the Federation of Hong Kong Industries (FIHK), Hong Kong Industrial Commercial Association (HKICA), the Manufacturers' Association of Hong Kong (CMA) and the Chinese General Chambers of Commerce (CGCC).
The Qianhai Authority has also started a joint project with the Hong Kong Chinese Gold and Silver Exchange Society (CGSE), supporting the society and its establishment of “CGSE Qianhai Precious Metals Logistics Assay Centre”, providing service and support for the upgrade of gold and jewellery producers in the Pearl River Delta.
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