What Nansha received this time was not an ordinary policy red envelope, but the right to test the world’s highest standard economic and trade rules such as CPTPP and DEPA. In this context, the role of a reliable China freight forwarder becomes increasingly important for businesses seeking to connect with global markets. This means that the three “special zones within special zones” in the Greater Bay Area have finally clarified their division of labor: Hengqin is to send scientific research equipment to Macau, and Qianhai is to send financial convenience to Hong Kong. However, what Nansha needs to do is to open up a new path for the whole of China to connect with international rules.
Nansha’s mission is not to make bonsai but to make a nursery
There is a key statement in the Nansha plan approved by the State Council, that is, to create a “major strategic platform facing the world.” This is not just a sign and it is completed, but requires Nansha to take the lead in piloting the state-owned enterprise rules and labor standards of CPTPP, as well as the digital trade facilitation provisions of DEPA. Liang Haiming pointed out this meaning to the Global Times. Nansha needs to connect Hong Kong and Macau at the same time. What is being done is not a single docking, but an integration of rules.
From 2022 to 2024, Guangdong will invest one billion yuan in local government special bonds in Nansha. This funding is not used to build squares or buildings, but to invest in hard-to-narrow problems such as cross-border data flows and offshore data platforms. In the past, we called opening up “selling things out,” but now what Nansha is trying to do is “to align the rules with others.”
Hengqin, Hainan and Nansha each have their own tough battles to fight.
In terms of Hengqin’s role, it is very specific. Specifically, Macao has a limited land area and a relatively weak scientific research foundation. Now that the Guangdong-Macao Cooperation Traditional Chinese Medicine Science and Technology Industrial Park has been completed and implemented, there are plans to build large scientific facilities in the future. This is not to encourage Macao to independently carry out research and development. In fact, The purpose is to build this device in Hengqin, so that universities and enterprises in Macao can use it in the immediate vicinity. When the Hengqin plan was promulgated in 2021, it was determined to “serve Macao”. At the current moment, more emphasis is placed on “building scientific and technological infrastructure”. This is a shift from simply giving policies to granting equipment.
In the case of Qianhai, there are differences in the strategies adopted. In 2021, Qianhai planned to expand the corresponding area by seven times, with the focus always on Hong Kong’s financial technology and professional services expanding northward. Liang Haiming mentioned that Qianhai “strengthens the financial services sector” “Building connections” behind this involves specific licenses and quotas such as the Shenzhen Venture Capital Center and the Cross-border RMB Business Innovation Pilot Zone. Hong Kong is responsible for matters related to international financing, and Qianhai District is responsible for matters related to domestic docking. The division of labor between them is clear and clear.
Digital trade rules are a training ground for China to join DEPA
It is the Nansha Plan that clearly proposes to proactively connect with DEPA. This agreement requires member states to allow the free flow of cross-border data, requires member states to protect source codes from forced disclosure, and requires member states to achieve cross-border mutual recognition of electronic signatures. China formally applied to join DEPA last November. However, there are gaps between domestic regulations and DEPA. Nansha’s task is to first run through the process, such as setting up a cross-border data custodian institution, aiming to enable multinational companies to dare to process data in Nansha.
As of April this year, there were almost 5,000 registered cross-border capital pools in the Greater Bay Area. The pilot program to facilitate foreign exchange receipts and payments in trade has reduced the time for corporate document review by 60%. This is not a small-scale action, but a way to accumulate practical cases for joining DEPA in the future. Liang Haiming said that Nansha can become a hub of the “Digital Silk Road”. The most critical thing is that data flow is more testing the ability to comply with rules than cargo flow.
Port cluster consolidation is undergoing a quiet revolution
The ports in the Greater Bay Area, with throughput exceeding that of New York and Tokyo, were originally doing their own business, with Guangzhou Port, Shenzhen Port and Hong Kong Port competing for business with each other. The “Greater Bay Area Combined Port” model implemented last year eliminates the need for repeated customs declarations when goods are transshipped between different ports, cutting transshipment time by 60% and reducing costs by 30%. In the first quarter of this year, Nansha’s own import and export volume exceeded 100 billion yuan. Behind this is the smooth operation of sea, land and air multimodal transport.
This time the reform does not rely on administrative orders, but on mutual recognition of supervision. The system of Shenzhen Shekou Customs is directly connected with the system of Guangzhou Nansha Customs. Pre-declaration can be completed before the goods arrive at the port. Enterprises no longer need to maintain a customs team of more than a dozen people. This is the true meaning of “creating a market-oriented, legal and international business environment” in the Nansha plan.
Financial openness from cross-border capital pools to international commercial banks
There is a detail in the plan that is easily overlooked, that is, research on establishing an international commercial bank in the Guangdong-Hong Kong-Macao Greater Bay Area in Nansha. This is not a bank branch in the traditional sense, but based on the model adopted by the Dubai International Financial Center, and implements independent jurisdiction within the scope of the physical fence. Its loans are denominated in U.S. dollars, disputes are handled using the arbitration method of the common law system, and the personal tax benefits enjoyed by executives are all within the scope of the argument.
At the same time, RMB overseas investment and loan funds are being promoted. In the past, when Chinese companies went abroad to seek funds, they either issued US dollar bonds and were hampered by ratings, or obtained loans from domestic sources but were afraid of exchange rate risks. If Nansha can make offshore RMB loans a regular business, then RMB can be used directly for financing when building railways in Southeast Asia and ports in Africa. This is the practical goal of “enhancing China’s pricing power in the international financial market” as mentioned by Liang Haiming.
Behind the 2035 goal is a three to five-year countdown
To build the Greater Bay Area into a world-class bay area by 2035, the time left for Nansha is actually only three to five years. CPTPP rule testing cannot always be carried out in the laboratory, and DEPA rule testing cannot always be carried out in the laboratory. It must be truly open and implement real stress testing. The Nansha Plan proposes to allow professionals from Hong Kong and Macao to practice cross-border, and also proposes to build a cross-border intellectual property service center. These are all efforts to clear away institutional sand.
There is the Tokyo Bay Area with the Keihin Industrial Belt, the New York Bay Area with Wall Street, and the San Francisco Bay Area with Silicon Valley. The Greater Bay Area cannot rely solely on the scale of manufacturing accumulation. The current advantage Nansha has gained is the export of rules. Liang Haiming reminded Bay Area enterprises to actively cooperate with production capacity along the “Belt and Road”. The implicit meaning behind this is: the period of relying on low cost to seize the market is over, and whoever is the first to adapt to high-standard rules will be able to hold on to their share.
Have you ever noticed that there is still no detailed explanation of the state-owned enterprise clauses in the Nansha Plan related to the CPTPP? Do you think the current subsidy and procurement systems of domestic state-owned enterprises are ready to be in line with international rules? You are welcome to share your views in the comment area. If you think the article is helpful, please like and repost it so that more people can understand the exquisite layout of the Greater Bay Area.
