Guangdong's free trade zone (FTZ) should prioritize development of the high-end services sector and offer approval of projects at "special zone speed," Chinese Premier Li Keqiang said Monday.
Premier Li Keqiang visited Guangzhou Nansha Free Trade Zone
South China's Guangdong Province is in the vanguard of the country's reforms and should take advantage of its geographical location to strengthen integration with Hong Kong and Macao, Li said during his visit Monday to the Guangdong free trade zone.
Preference should be given to developing the high-end services sector - in areas such as finance and technical research - in the zone, Li said.
His remarks came after the decision in December by the State Council, the country's cabinet, to approve three new FTZs - in South China's Guangdong Province, North China's Tianjin Municipality and East China's Fujian Province.
The country's first FTZ, the China (Shanghai) Pilot Free Trade Zone, was launched in September 2013.
The three new zones will be modeled on the Shanghai FTZ, but will introduce new experiments based on their local characteristics, the State Council said, without offering further details.
"There will be a huge opportunity to develop the financial sector in the zone, particularly more specialized financial services. I expect a shipping center to be set up in the zone, which will call for upgraded financial services to support the shipping industry," Qin Jian, a research fellow with the regional economic research institute of the Guangzhou Academy of Social Sciences, told the Global Times Monday.
"The zone could also consider the possibility of initiating a mechanism to allow the yuan to flow from Hong Kong back to the mainland as it advances financial services cooperation with Hong Kong," Qin said. "There is also great potential for other innovative financial services."
Li's visit to Guangdong's FTZ followed his visit on Sunday to China's first Internet-based bank, WeBank, in Shenzhen. Li said he expected online competition in the banking sector to cut costs and spur further financial reforms.
While he was in Shenzhen on Sunday, Li also visited leading telecommunications equipment maker Huawei Technologies Co, holder of 36,500 patents. Shenzhen is also home to other prominent high-tech companies, such as Tencent Holdings and ZTE.
The Pearl River Delta has already begun a transition of the region's economy away from being driven by labor-intensive manufacturing industries toward a model based on the services sector, Yu Fugong, director of the Economics Research Department at the Party School of the Communist Party of China Guangdong Provincial Committee, told the Global Times Monday.
The Guangdong free trade zone is expected to follow the Shanghai FTZ in adopting a "negative list" approach for foreign investment, which ensures foreign companies can invest without any restriction in sectors that are not on the list of sensitive areas, Yu noted.
The Guangdong FTZ negative list will probably be available for Hong Kong and Macao investors in the services industries within the boundaries of the zone, said Yu, noting that the Guangdong FTZ could become the most open zone in terms of services investment.
"Minimizing the approval procedures is the ultimate goal of the reforms to be expected in the zone. But it may take time, as decentralization will affect the vested interests of different departments," Qin said.
Li also said on Monday that the Guangdong FTZ should simplify procedures for project approval so that it can be conducted at "special zone speed."
The zone has already cut the duration of project approval to 145 days from 799 days and reduced the number of certificates needed for approval to 10 from 103, according to information published on the central government's website Monday.
China launched the Shenzhen Special Economic Zone in 1980 as an experiment for opening up China's economy to foreign trade and investment. Preferential policies were introduced to allow projects to proceed as quickly as possible in the zone, where construction of one storey of a building could be completed within three days.
"Shenzhen Speed," or "Special Economic Zone Speed," was a phrase coined in the 1980s to describe the stunning speed of building a structure in the special economic zone.