- Author: Peacelv
- Editor: JIHO
According to Xinhua News Agency on September 6, the CPC Central Committee and the State Council issued a “comprehensive deepening of the Qianhai Shenzhen-HongKong Modern Service Industry Cooperation Zone reform and opening-up program” (referred to as “program”), and issued a notice, requiring all regions and departments to seriously implement in conjunction with the reality. According to the above “program”, the total area of Qianhai Cooperation Zone will be expanded from 14.92 square kilometers to 120.56 square kilometers, an expansion of more than seven times.
The opening chapter of the program highlights Hong Kong. CCP said that the development and construction of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (referred to as Qianhai Cooperation Zone) is an important initiative to support the economic and social development of Hong Kong and to enhance the level of cooperation between Guangdong, Hong Kong and Macao. Also it helps to build a new pattern of opening up to the outside world, which is of great significance to enhance the centripetal force of Hong Kong compatriots towards the motherland.
CCP also referred to that it supports the implementation of national policies and measures to expand the opening up of the financial sector to the outside world in Qianhai Cooperation Zone, and early and pilot implementation in areas such as interoperability with Hong Kong’s financial market, cross-border use of RMB, and facilitation of foreign exchange management. Carrying out pilot bank accounts in domestic and foreign currencies to provide market players with high-quality, secure and efficient bank account services. It supports qualified financial institutions to carry out cross-border securities investment and other businesses.
And it also supports the Hong Kong Exchanges and Clearing (HKEX), Qianhai Joint Trading Center to carry out spot trading of commodities in compliance with the law. Relying on technical monitoring, early warning, disposal and other means, it enhances the ability to prevent and resolve financial risks in Qianhai Cooperation Zone.
According to market data, Qianhai Weizhong Bank, the first private internet bank in China, located in Qianhai, Shenzhen. At the end of 2020, the number of its active personal customers exceeded 270 million, and about 80% of the “microfinance” customers are college degree or below, with an average loan of 8,000 yuan, which can solve the urgent needs.
Now the total number of licensed financial institutions in Qianhai has reached 252, forming “six cross-border” financial brands such as cross-border RMB loans and cross-border two-way debt issuance.
In fact China wants to use Hong Kong as an outlet for cross-border RMB to the outside world through the Qianhai Cooperation Zone, while using Hong Kong’s financial services capabilities to serve the Qianhai Joint Exchange. At the same time, due to the deterioration of the political and economic environment, it can also ease the employability of Hong Kong people.
But the economic environment in China is very bad now. Evergrande, Fuli Real Estate, Agile and other leading real estate companies are facing the broken capital chains, bill forgery and other problems. More seriously, some of them even are at the edge of bankruptcy. Evergrande will eventually be become China’s “Lehman Brothers”, which will make a domino effect in China’s domestic banking and finance industry, trust industry, bonds, real economy and other related enterprises, while bringing millions of unemployed, as well as the financial hole which could not be filled.
At the same time, Japanese and Korean companies such as Samsung and Toshiba have been accelerating the pace of relocation out of China, and the relocation of course has also caused a large number of unemployment. Meanwhile, the Covid-19 virus and the vaccine disaster have been dragging down China’s economy.
In shortly, the Chinese Communist Party does not have such a strong capital and strength to support the construction of Qianhai Cooperation Zone, which will eventually politicize Hong Kong economically. Finally the “One Belt, One Road” RMB internationalization idea will not be achieved.