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A full-scale reform plan has been unveiled in the city of Shenzhen, as the Special Economic Zone (SEZ) marks its 40th anniversary. On October 11th, 2020, the ‘Implementation Plan for the Pilot Comprehensive Reform of Building a Pilot Demonstration Zone of Socialism with Chinese Characteristics in Shenzhen’ was announced. The pilot reforms focus on areas such as the legal and business environment, further opening of the economy to foreign investors, technology, environmental protection, and urban space governance. This comprehensive plan consists of three main stages, and it is aimed to modernize and internationalize the city from 2020 to 2025.
Firstly, the plan attempts to create a more market-oriented legal business environment. To achieve this, regulators may eliminate or relax restrictions related to the Negative List which prohibits foreign investment in certain industries such as energy, utilities, transportation, telecommunications, and education. In addition, an emphasis will be placed on intellectual property rights and respective regulations. Among other measures, a more efficient visa issuance process for foreign talents is anticipated.
Secondly, Shenzhen will implement reforms in both the financial and shipping industries in order to establish a more open economy in the region. Qualified domestic companies will be supported to go public in foreign markets, while qualified foreign companies will be encouraged and supported to set up asset management and securities companies in Shenzhen. The shipping industry is expected to benefit from the improved registration system and a more open oil supply market.
Thirdly, the city will focus extensively on environmental protection. For example, setting mandatory standards and a green industry certification system, as well as enforcing a compulsory liability insurance system in relation to pollution, are just some of the measures outlined in the plan.
Foreign investors are expected to benefit from the intended reforms, as Shenzhen is on track to create a very open economy with an efficient market-oriented allocation system, fair competition, and an improved legal and dispute resolution mechanisms in place. The details of the plan will be announced in the near future.
Overall, the plan demonstrates the adherence of the regulators’ policies towards further market opening and the ambitions to turn Shenzhen and the Greater Bay Area into a global technological, financial, and innovation hub.
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