Economic Update


Greater Autonomy for Shenzhen under New National Plan

As Shenzhen Special Economic Zone celebrates its 40th anniversary, a new plan from the Central Government has set out the future direction of the city, including greater freedom to enact reforms.

The General Office of the Communist Party of China Central Committee and the State Council have jointly issued a comprehensive plan to implement reforms in Shenzhen, turning the city into a pilot demonstration area of socialism with Chinese characteristics (2020-2025).

The plan outlines Shenzhen’s development for the next five years, with key objectives being to:

  • improve the systems and mechanisms for market-based allocation of factors of production
  • create a market-oriented, legalized and international business environment
  • improve the environment for technological innovation
  • develop a high-level open economy
  • improve the supply system of livelihood services
  • improve the governance system of the ecological environment and urban space
  • strengthen security measures

It is worth noting that the plan gives Shenzhen greater autonomy to carry out reforms in key areas. It also emphasizes the need to promote high-level cooperation between Shenzhen and Hong Kong, and strengthens Shenzhen’s role as the core engine in the development of the Greater Bay Area (GBA).

Various pilot measures will be introduced to grow the capital market in Shenzhen. These include:

  • the launch of a pilot registration system for the growth enterprises board
  • allowing innovative enterprises to issue stocks or depositary receipts
  • the launch of real estate investment trusts in the field of infrastructure
  • supporting the commencement of internal testing of digital RMB in pilot areas
  • facilitating the research, development and use of digital RMB to enhance international cooperation

On data use, the plan proposes to:

  • accelerate the development of a data marketplace
  • push forward the opening and sharing of government data
  • support Shenzhen in developing into a data hub for the GBA
  • explore setting up a data trading market or use existing trading platforms for data trading

With regard to market opening, a list of special measures for Shenzhen to relax market access will be formulated in sectors such as energy, telecoms, public utilities, transport and education, as well as to further open up the financial and shipping industries.

Efforts will be made to encourage eligible enterprises to finance and list outside Mainland China. The plan also aims to support Shenzhen in promoting RMB internationalisation on a pilot basis and improve access to private equity funds.

According to the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, released last year, Shenzhen will leverage its role as a Special Economic Zone to expedite its transformation into a modern and international city as well as a capital of innovation and creativity.

The new plan for Shenzhen adds more details to the Outline Development Plan. It also covers areas such as the establishment of a capital market and financial innovation where Hong Kong enjoys clear advantages or is actively working to develop. Accordingly, it is expected that there will be more cooperation between Hong Kong and Shenzhen.

As for Hong Kong’s role in the GBA, the Covid-19 pandemic has inevitably diverted business and public attention away from the development of the GBA, while social restrictions and lockdown measures have curbed the cross-border flow of people. Therefore, the release of this new plan for Shenzhen, and the Chief Executive’s Policy Address rescheduled for November, will serve as opportunities to refocus public attention on the development of the GBA initiative.


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