Shenzhen to switch to service industry
深圳实行经济改革 转向服务产业

Economic reform is high on the agenda for China in the coming year. Shenzhen, just north of Hong Kong, is creating a new special economic zone catering to businesses in the service industry. More flexible policies will be applied, especially in finance.

Shenzhen was China’s first special economic zone. Now it is becoming a pilot for the service industry, with the creation of the Qianhai Shenzhen-Hongkong Modern Service Industry Cooperation Zone. Qianhai-based firms will be given more flexible policies to explore financial reform.

“Qianhai is one of the first areas to allow cross-border loans in Chinese yuan. Qualified enterprises can issue Chinese yuan bonds to Hong Kong investers, or establish mother funds of private equity in Hong Kong. It also supports overseas private equity funds to invest in Qianhai. Cross-border bonds have already exceeded 10 billion yuan.” Wang Jinxia, spokesman for Qianhai Shenzhen-Hong Kong Cooperation Zone, said.

The 15-square-kilometer zone is designed to be a huge business district for financial services, logistics, information services and technology services.

Reporter: “Qianhai is built on reclaimed land. The infrastructure construction will be completed by 2015. The government says it’s going to be a center of producer-service industry in the Asia-Pacific region.”

As China’s manufacturing industry flattens out, enterprises are looking for ways to capitalize on services. Qianhai is becoming a popular place for entrepreneurs and more than 2,600 companies have now come here.

“Chinese enterprises must upgrade their business models. We will change from a manufacturing-led economy to a service-led economy. China Merchants Group is now focusing on the service industry; including finance, transportation, and commercial development.” Yang Tianping, general manager of China Merchants Shekou Industrial Zone, said.

The value added of the service industry in Shenzhen accounts for 58% of its GDP, 13% higher than the national average. The local government says it is confident the figure will exceed 60% in 2014, with the help of Qianhai cooperation zone.