Image source,Xinhua
Hengqin has been formally developed since 2009 with the goal of exploring a new model of Guangdong-Hong Kong-Macao cooperation model under “One Country, Two Systems”.
Within a week, China issued two plans for the construction of special areas in Guangdong. One was to expand the scope of the Shenzhen-Hong Kong Modern Service Industry Cooperation Zone in Qianhai, Shenzhen, and the other was to establish the Guangdong-Macao Intensive Cooperation Zone in Hengqin, Zhuhai. Among them, Hengqin’s operating model has attracted a lot of attention.
In the previous incident, the theory that “Macao leases Hengqin” has been widely circulated, but according to the “Overall Plan for the Construction of the Hengqin Guangdong-Macao Deep Cooperation Zone” jointly issued by the Central Committee of the Communist Party of China and the State Council of China, this will not happen. Guangdong and Macao will co-administer it. Hengqin, Beijing wants to “enhance the party’s leadership and party building in the cooperation zone in an all-round way”.
Some public opinions directly pointed out that this was a “new one country, two systems” experiment, and some commentaries said that the Hengqin Cooperation Zone would be a “demonstration zone for introducing socialist factors to optimize capitalism.”
Analysts pointed out to the BBC Chinese that this “Hengqin New Deal” is more like an experiment in crossing a river by feeling the stones.
What does the “Plan” specifically say?
Image source,Xinhua
Aerial view of Macau Tower (middle) and Hengqin Island of Zhuhai, Guangdong (back) by drone from the Macau Peninsula. There is only a narrow waterway between Hengqin and Macau’s Taipa Island, Cotai City Reclamation Area and Coloane Island.
At present, Hengqin Island, which belongs to Zhuhai City, is located on the west side of Macau, covering an area of 106 square kilometers, which is more than three times the land area of 32.9 square kilometers of the Macao Special Administrative Region. At present, the island has established the Hengqin campus of the University of Macau and the Hengqin Port Macau Port Area, which are completely under the jurisdiction of Macau, covering a total area of about 1.6 square kilometers. The “Guangdong-Macao Intensive Cooperation Zone” will involve the entire Hengqin island except for the University of Australia and the port area.
The population of Hengqin Island was 85,700 by the end of 2020, and the population of Macau SAR was 682,500 by the end of June 2021.
The “Overall Plan for the Construction of the Hengqin Guangdong-Macao Intensive Cooperation Zone” released on September 5 first stated that the General Secretary of the CPC Central Committee and Chinese President Xi Jinping emphasized that “the original intention of building the Hengqin New Area is to create conditions for the diversified development of Macao’s industries.” The “Plan” puts forward: “Focusing closely on promoting the moderately diversified economic development of Macau, adhering to’one country, two systems’, and acting in accordance with the law… Vigorously develop new industries that promote the moderately diversified economy of Macau, accelerate the construction of new homes that facilitate the life and employment of Macau residents, and strive to build and The new system of integration and high-level opening of Macao will continue to improve the new system for Guangdong and Macao to discuss, jointly build, manage and share, support Macao to better integrate into the overall development of the country, and inject new momentum into Macao’s practice of’one country, two systems’ for stability and long-term development.”
“Promoting the moderately diversified economic development of Macao” is an old problem spanning the terms of the three chief executives. In 2006, in the “Outline of the Eleventh Five-Year Plan for China’s National Economic and Social Development” (Eleventh Five-Year Plan), Beijing proposed “supporting Macao in developing tourism and other service industries, and promoting the moderately diversified economic development of Macao”. Since then, similar expressions can be found in the Twelfth Five-Year Plan in 2011 and the Thirteenth Five-Year Plan in 2016.
Macau’s economy and government taxation have been highly dependent on casinos for many years. The COVID-19 (new crown virus) epidemic has caused cross-border tourism to stop and casinos closed. In 2020, the gross gaming revenue for the whole year fell by 79% year-on-year to 60.441 billion. Macau Patacas (7.546 billion US dollars; 48.723 billion yuan). Tourism in mainland China will resume in 2021. From January to August, gross gaming revenue reached 61.908 billion patacas. However, due to the impact of the August epidemic, Li Weinong, the director of the Macao Special Economic Zone’s Economic and Financial Secretary, also stated that the annual revenue of 130 billion patacas needs to be adjusted. Target.
Image source,China News Service
Macau casinos were once completely shut down due to the new crown virus epidemic. It is even more important for Macau to get rid of dependence on the gaming industry.
Administratively, the cooperation zone will be upgraded to the same level as Zhuhai City. Under the leadership of the Guangdong-Hong Kong-Macao Greater Bay Area Construction Leading Group of the State Council of the People’s Republic of China, the Cooperation Zone Management Committee will be established. The Governor of Guangdong Province and the Chief Executive of the Macao Special Administrative Region will jointly serve as the directors of the management committee. , The Macao Special Administrative Region appoints an executive deputy director.
The relevant departments of Guangdong Province, Macau Special Administrative Region and Zhuhai City will all participate in the work of the management committee, but the “Overall Construction Plan” emphasizes that the cooperation zone will “establish the Guangdong Provincial Party Committee and the provincial Security, criminal justice, social security, etc., fulfill the territorial management functions, and actively cooperate with the cooperation zone management and enforcement agencies to promote the development and construction of the cooperation zone.”
The cooperation zone will implement the “first-line” and “second-line” border defense systems familiar to the former special economic zone, but it will mainly focus on the exemption of goods. The entry and exit of personnel between the cooperation zone and Macau adopts the model of “cooperative inspection, one-time release”, and at the same time, Macau vehicles are allowed to enter and exit the Hengqin “first line” directly without applying for a license plate from mainland China. Inter-track railway docking. Macau’s education, medical, and social service systems will be “connected” to the cooperation zone to facilitate the migration of Macau residents.
Image source,Xinhua
Hengqin will implement the “cooperative inspection, one-time release” model on the basis of the “two inspections in one place” for customs clearance in Macao, and the entry and exit procedures in the same direction will be completed in one go. The Hong Kong-Zhuhai-Macao Bridge between Macau and Zhuhai is the first border port in China to implement this model.
Current affairs commentator Liu Ruishao commented on Hong Kong’s “Situation News” that Qianhai aims to absorb Hong Kong’s “construction power”, capital and international relations and other advantages to accelerate development, and at the same time use the relationship between the two places to counter changes in other places, including Sino-foreign struggles and international relations. Environment, etc. The Beijing authorities have evaluated Hong Kong’s international relations and would rather use Hong Kong’s strength, but not give greater policy powers. This shows that the Chinese authorities still lack confidence in holding Hong Kong’s “comprehensive governance”.
In terms of the application of laws, the “General Construction Plan” proposes to gradually build an institutional system that integrates civil and commercial rules into Macao and internationally under the premise of following the Chinese Constitution and the Basic Law of Macao. The long-term development of the district provides institutional guarantees, but at the same time, it is necessary to “make full use of the legislative power of the Zhuhai Special Economic Zone, allow Zhuhai to base itself on the needs of the reform and innovation practice of the cooperation zone, and make modifications to laws, administrative regulations, and local regulations in accordance with authorization.”
In terms of industry, the cooperation zone will focus on the development of modern financial industries such as technology research and development and high-end manufacturing, Chinese medicine, rough diamond (rough diamond) processing, cultural tourism, exhibition, trade, and cross-border RMB settlement. The “Overall Construction Plan” emphasizes the need to encourage Macao youth to work and start businesses in the cooperation zone.
Does Hengqin want to implement the “new one country, two systems”?
The “Overall Plan for the Construction of the Hengqin Guangdong-Macao Intensive Cooperation Zone” mentioned in the strategic positioning of Hengqin that it is necessary to “enrich a new demonstration of the practice of’one country, two systems'” and “create a regional development demonstration with Chinese characteristics and highlight the advantages of the’two systems’. , To accelerate the realization of integrated development with Macao”.
The “Plan” does not clearly state which elements of Macau’s “two systems” will be introduced to the Hengqin Cooperation Zone, but it is proposed that the Hengqin Cooperation Zone “the public service and social security system should be in an orderly connection with Macau.”
Image source,Xinhua
The University of Macau is the first Macau SAR institution stationed in Hengqin. Its new campus is currently separated from the rest of Hengqin Island by fences and “moats”.
Dr. Yu Yongyi, associate professor of the Department of Government and Administration at the University of Macau, told the BBC Chinese reporter: “I don’t think (Hengqin New Deal) can be completely linked to’one country, two systems.’ , I’m already talking about Hengqin being a’special zone in a special zone’… it will become a junction between the inland system and’one country, two systems’.”
“What the hell is it? If you say it is another’one country, two systems’, you can say it like this. I will not argue, but if you are talking about the’one country, two systems’ of Hong Kong and Macau, I would think it is not necessarily the same thing. “
However, Yu Yongyi agrees that in accordance with the customs clearance arrangements of the “Overall Construction Plan”, the barrier between Macau and Hengqin will tend to be loose in the long run, and the customs may even be removed.
On August 14, 2009, the State Council of China approved the implementation of the “Hengqin Master Development Plan”. At that time, it was determined to gradually build Hengqin into a demonstration zone for exploring new models of cooperation between Guangdong, Hong Kong and Macao under “One Country, Two Systems”.
Cui Zizhao, the former deputy editor-in-chief of the media “Aisha Daily” under the New Macau Academy of the democratic political group of Macau, believes that this is to “redefine’one country, two systems’.” He told the official US Radio Free Asia: “In the past,’One Country, Two Systems’ was a passive’two systems’ for Hong Kong and Macau. It is to maintain the existing system. Now he wants to be more proactive in guiding the’two systems’ issue.”
“In this new area, it is so important to use the Macau system, because this element is likely to attract foreign investment, which may be beneficial to Hengqin and the Greater Bay Area. Therefore, it is necessary to use the Macau system to transform Macau and turn Macau into a whole Part of the function of the Greater Bay Area is that it can be manipulated by China, and China takes the initiative to use Macau’s advantages to develop this new area.”
Dr. Peng Aixuan, a Greater China economist at ING Bank in Hong Kong, told the BBC Chinese reporter: “Of course Macau is’one country, two systems’, but we have to be very careful about Hengqin. Hengqin does not have a’one country, two systems’ element.”
Peng Ailao’s understanding is that the Hengqin Cooperation Zone will add Macau elements to the mainland system. “It is now like a mixed model… life and work will make you feel very vague-where are you?- But passing the border means passing the border, so it is necessary for the authorities to clarify how the specific laws will be applied.”
Image source,Xinhua
It remains to be seen how Hengqin will implement the Guangdong-Macao co-management model.
Peng Aihui believes that one of the reasons Hengqin adopted the Guangdong-Macao condominium model is that the development of Hengqin also includes the linkage development of western Guangdong. “So I feel from the beginning to the end that you can’t have the final say, even if it is said by Guangdong Province. After all, or Zhuhai City has the final say, it is impossible. Both parties must participate in order to open the door.”
Dr. Yu Yongyi pointed out that the “new content” of the “Overall Construction Plan” is to clarify the role of “Hengqin Supporting the Development of Macao”. However, the emphasis on “Party Building” is rarely seen in other development projects. “It seems that This is a major feature under the leadership of Xi Jinping.” Dr. Peng Aixuo believes that since Hengqin is on the mainland side, the economic system should be socialist, “but now that it highlights (the party leadership) this point, I feel that the’rules’ will become (in Hengqin) doing business. An important link”.
Speaking of emphasizing the leadership of the Communist Party of China in the Hengqin Cooperation Zone, Guan Pinfang, a former special advisor of the Central Policy Group of the Hong Kong Special Administrative Region Government, wrote an article in Beijing’s Hong Kong agency controlling the media that Hengqin “will become a means of introducing socialist factors to optimize capitalism. Demonstration Area”.
Guan Pinfang wrote: “This demonstration zone for optimized capitalism does not follow the path of capitalism’s laissez-faire in the past. Taking the respective advantages of the two aspects to make a brand-new attempt, it may be referred to as the’Hengqin New Deal’ for short.”
“The concept of shared wealth is actually not new. It is taxation… It is a progressive tax rate. The more you make money, the more tax revenue. These taxes will be used for some poor families and regions.”
“Then can Hengqin collect more taxes? Of course… Do you think it will obliterate Hengqin’s attraction to attract investment? I don’t think it will. Hengqin is always connected with Macau, Zhuhai, Zhongshan, Foshan and other places The land can enjoy the preferential policies, and the development of Hengqin can still achieve profit.”
This “Overall Construction Plan” promises that the corporate income tax rate for qualified companies and the highest personal income tax rate for high-end talents will be 15%.
What are the things to be overcome by the “Hengqin New Deal”?
The overall plan has been established, and there are also three development phase goals for 2024, 2029, and 2035, but many details of the development of the Hengqin Cooperation Zone are still to be implemented.
Peng Aixuan recalled her memories of fieldwork in the early years of Hengqin’s development: “I saw that the plan was perfect at the time. It is now adding new projects such as chips and AI (artificial intelligence). I don’t think it deviates from the original Hengqin. There is a planning roadmap.”
Peng Aihao believes that it is a fact that the Hengqin Cooperation Zone has allowed the development of Macao to expand, but Macao will not enjoy the full autonomy of developing in Hengqin, and everything needs to be discussed and implemented with the Guangdong side.
“For example, Chinese medicine, when I went to investigate, there was already a piece of land on the sand table (on the planning map) for the Chinese medicine industry, and I called it a’Chinese medicine village’. How to develop high-tech Chinese medicine and whether to build a Chinese medicine hospital In fact, I think both parties will have to talk about these at that time.”
Image source,China News Service
Hengqin has already planned land for the Chinese Medicine Park and other areas.
The British Economist Intelligence Unit (EIU) is pessimistic about the development of the Hengqin Cooperation Zone. EIU issued an analysis briefing on September 7, stating that the policies in the overall plan of the Hengqin Cooperation Zone are not much different from those in the Hainan Free Trade Zone. This will limit the enthusiasm of enterprises to invest in Hengqin and slow down the process of moderate economic diversification in Macau. The vast land that Hengqin can provide will allow Macau to develop manufacturing. However, even under the most optimistic assumptions, the influx of investment that the authorities want to see will not be realized in the next two or three years.
Yu Yongyi believes that there are indeed many contradictions in the “Hengqin Guangdong-Macao Intensive Cooperation Zone Construction Overall Plan”, and this is due to the fact that the relevant authorities have “didn’t say clearly, or dare not say so clearly”. The ultimate success depends on whether I can wait and see. However, whether the economy of the cooperation zone can be maintained “self-sufficiency”, the residents of the zone can be employed in the zone, and the cooperation zone has enough tax revenue to maintain its operating expenses, which will be its biggest development risk.
Yu Yongyi said to the BBC in Chinese: “Every step in the middle is still throwing stones across the river, but whether this is a small stream, a river, or a big river, the water used to enter the stone is very deep, which is not known.”
“But the point is, at least in the process they (the government) are doing something, not’laying flat’.”
Peng Ailao also agrees that Hengqin will face the dilemma of being unable to be self-sufficient, but she pointed out to the BBC Chinese that what worries her most is the recurrence of the same problems in many new development zones in China—the industry has not settled in. The real estate is built.
“This is the last thing I want to see. What I want to see is that it can really produce an industry that can be linked with Macau, Macau people can benefit, Guangdong Province can also benefit, not 80% of real estate.”
“It is difficult to cultivate an industry… but what is the most attractive thing for a piece of land? Real estate. Qianhai is a good example. It really has industries and real estate. The industry and real estate go side by side. questionable.”