China Daily Hong Kong Edition: Benefits of cooperation between Qianhai and HK reach beyond 2 cities

Increased cooperation between Qianhai and Hong Kong in promoting offshore RMB business will also benefit economies participating in the 21st Century Maritime Silk Road, financial professionals told a two-day Qianhai Conference held in Shenzhen over the weekend.

The conference, Qianhai’s Financial Development: Challenges and Opportunities, featured a public forum co-organized by Shenzhen’s Qianhai Cooperation Zone and China Daily Asia Pacific, and four sessions on Saturday and Sunday.

"The pie of offshore RMB business is right now very small,” said Vincent Lee, an executive director of Hong Kong Monetary Authority. “There are potentials in developing offshore RMB business” as the pie grows, he said.

Rather than calling Qianhai a competitor, Lee said the two sides could play a complementary role. “Further policy headroom and developments in Qianhai will lead to more business, trade and financial links between the (Qianhai) special zone and Hong Kong. This will mean more business opportunities for both and better services to participants in the 21st Century Maritime Silk Road,” he said.

Lin Chen, chair professor and associate dean of Faculty of Business and Finance at University of Hong Kong, explained the cooperation of the two cities from another perspective. “Qianhai has every possibility to becoming a hub for cross-border merger and acquisitions (M&A) of Chinese companies,” he said at the forum.

Lin noted that the number of small- and medium-sized Chinese mainland enterprises seeking cross-border M&As is growing and many more industries are getting involved. Qianhai, in close cooperation with Hong Kong, could help improve the access to Hong Kong’s capital market.

Director of Qianhai Authority Zhang Bei said in his keynote speech at the conference: “The huge economic size of the Pearl River Delta (PRD) region promises Qianhai a great opportunity to develop its modern service industry.” GDP of the PRD region amounted to more than $1 trillion in 2013 and is expected to grow by an average 9 percent in each of the coming years.

"The central government has granted Qianhai a package of favorable policies covering finance, taxation, law and human resources. Serving as a gateway for foreign investments in China and for the country’s outgoing investments, Qianhai will play a very important role,” Zhang said.
Apart from cooperation between Qianhai and Hong Kong, panelists also discussed the development of the 21st Maritime Silk Road.

The Silk Road initiative is China’s latest contribution to a new international financial architecture, said Huang Yiping, deputy dean of National School of Development at Peking University. “It is a supplement, rather than a replacement, of the existing system, to help support global economic development,” he said.

Huang said that there is still work to do in making the Silk Road from a Chinese government initiative to an international project. “Further clarification of the vision of the strategy is needed, given that it is an initiative for international collaboration,” he said.

Contact the writer at sally@chinadailyhk.com and grace@chinadailyhk.com
http://www.chinadailyasia.com/hknews/2014-12/08/content_15200178.html