Renewed push for Pearl River Delta zone

Renewed push for Pearl River Delta zone

With news of Shanghai's new free trade zone causing some jitters in Hong Kong, long-dormant talk of a similar zone integrating Guangdong province, Hong Kong and Macau has flared up among its proponents.

Speaking to a Singapore delegation last week, Qianhai's No. 2 official said efforts to bring the five-year-old idea to fruition are ongoing.

"We are very proactive in trying to realise the Guangdong-Macau-Hong Kong free trade zone plan," said Mr Zhou Yi You from the new special economic zone in Shenzhen, Guangdong.

But the ambitious idea faces many obstacles, from local protectionism to Beijing's concerns that the stakes of allowing people, capital and goods to flow freely between Guangdong and the two special administrative regions of Hong Kong and Macau are too high, given their divergent political and economic systems.

Thus, the more cohesive Yangtze River Delta, comprising Shanghai and parts of Jiangsu and Zhejiang provinces, is stealing a march on the Pearl River Delta (PRD) which includes parts of Guangdong, Hong Kong and Macau, says Hong Kong University economist Tao Zhigang.

The Ministry of Commerce announced last Thursday that the State Council had approved the establishment of the mainland's first free trade zone, in Shanghai. Details are still lacking but a free trade zone means zero tariffs on imports, like in Hong Kong.

Meanwhile, the economy will be opened further to foreign players - Xinhua news agency said laws on foreign investment could be suspended for three years.

The consensus is that this will pose a threat to the PRD. It led China's drive to open up its economy from the 1980s but in recent years after the 2008 recession, the export-oriented bloc has been outperformed by the Yangtze region.

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