The article quoted sources with knowledge of the situation as saying the province had been encouraged to “immediately” apply for central government approval to begin construction of the zone.
Guangdong already hosts three free trade zones: Qianhai near Shenzhen, bordering Hong Kong; Hengqin island in the Zhuhai special economic zone; and Nansha district of the provincial capital Guangzhou. Sources said the new integrated zone would bundle these zones together and also include the Guangzhou airport’s economic development zone.
The report comes as Shanghai prepares to launch its own new free trade zone, which will similarly integrate four previously existing zones in the city, and has been widely touted by state media as an area for major policy experimentation with financial reform, commodities trading and logistics services.
The reports about Shanghai have already set off a surge of investment in listed firms expected to benefit from the zone’s development, in particular port service providers and construction firms.
FTZs have also been proposed by other Chinese cities, including Tianjin and Xiamen, leading to concerns that the proliferation of competing zones risks policy overlap, deterring investors.
Guangdong’s Qianhai FTZ has been configured as a centre for experimentation with the liberalisation of the capital account, and domestic media has reported that Shanghai will also serve to trial currency and financial reforms.
A lack of specific details on incentives being offered to companies and vague policies have, however, posed barriers for some potential investors in Qianhai, which is still a construction site.
The most developed of the three Guangdong zones, Hengqin has attracted hundreds of billions of yuan from Hong Kong developers and mainland enterprises hoping to transform it into a holiday paradise. (Reuters)