Three-year Action Plan for the Development of International First-class Business Environment in the Greater Bay Area
On 25 December 2023, the National Development and Reform Commission released the "Three-year Action Plan for the Development of International First-class Business Environment in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA)" (hereinafter " Action Plan") on its official website. According to the Action Plan, with 3 years of effort, the GBA is expected to establish a business environment with relevant policies and mechanisms in line with internationally recognized rules. The systems and mechanisms of consultation, joint contribution and sharing will operate more smoothly and the market-based, legal-based and international business environment will reach a world-class level in the GBA. The market vitality and social creativity will be fully unleashed and market connectivity will be significantly enhanced. The GBA will strengthen its ability to attract and mobilize resources worldwide and achieve a leading position in the competitiveness of the business environment globally.
As pointed out in the Action Plan, the GBA is one of the regions with the highest degree of openness and the strongest economic vitality in the country. In 2022, the GBA has a GDP exceeding RMB13 trillion, accounting for 11% of the country’s GDP. Constructing a globally competitive business environment has been one of the important tasks as stated in the "Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area" (“Outline Development Plan”) which was released in 2019. The Outline Development Plan stated that it is necessary to give full play to the open platform and demonstration role of Hong Kong and Macao, support the nine cities in the Pearl River Delta to accelerate the establishment of institutional rules that are compatible with international high-standard investment and trade rules, give play to the decisive role of the market in resource allocation, and reduce administrative costs. Intervention, strengthening comprehensive market supervision, and forming a first-class business environment that is stable, fair, transparent, and predictable.
The Action Plan include action items and measures from the aspects of market environment, government services, legal environment, and open environment.
In terms of creating a unified, efficient, and orderly competitive market environment, the Action Plan makes it clear that market access must be optimized. Special measures to relax market access for the Hengqin Guangdong-Macao Deep Cooperation Zone will be formulated, the pilot scheme on relaxing market access for Guangzhou Nansha will be supported, and the implementation of special measures to relax market access in Shenzhen will be further promoted. The effectiveness of market access to the nine Mainland cities in the GBA will be assessed to facilitate feedback channels from business entities on hidden barriers to market entrance and improve the mechanism for handling and responding to opinions.
At the same time, further lifting or relaxing restrictions on Hong Kong and Macao investors including qualification requirements, percentage of shareholding, industry access and other restrictions will be studied. Relevant opening-up measures will be incorporated into the framework of the Closer Economic Partnership Arrangement (CEPA) between the mainland and Hong Kong and Macao. Unreasonable conditions imposed on enterprises for cross-regional operations and relocation will be removed to promote the smooth flow of key elements and resources.
In terms of creating an open environment with smooth circulation and win-win cooperation, the Action Plan requires the implementation of high-level investment liberalization and facilitation policies and the establishment and improvement of foreign investment facilitation mechanisms to attract investment in advanced manufacturing, modern service industries and strategic emerging industries from developed countries and attracting multinational companies and international organizations to establish their headquarters in the GBA.
In addition to action items concerning key components of constructing the business environment, the Action Plan also stated that “Bay Area Connect Schemes” has to be further implemented to accelerate the improvement of market integration in the GBA.
Targeting connect schemes related to the interconnectivity of financial markets, the Action Plan proposes to expand the opening of the financial industry to Hong Kong and Macao and support the Shenzhen Stock Exchange, Guangzhou Futures Exchange and Hong Kong Exchange to deepen practical cooperation. The two-way opening up of the bond market will be accelerated by promoting the implementation of Southbound Bond Connect.
In addition, the Action Plan stated that the pilot scheme for pilot cross-border credit reporting cooperation in eligible areas within the GBA will be explored to establish a mutual recognition mechanism for credit reporting products in Guangdong, Hong Kong and Macao, and enhance cross-border financing credit service capabilities. The Action Plan supports Hong Kong and Macao financial institutions to operate in accordance with laws and regulations in the Mainland cities of the GBA. It also supports qualified Hong Kong and Macao financial institutions and non-financial enterprises to issue financial bonds and corporate credit bonds in the Mainland.
Disclaimer: This article is based on extract of content from an article published on 粤港澳大湾区门户网 Wexin Public account and has been translated into English. If there is any inconsistency or ambiguity between the English content and the Chinese content, the Chinese content shall prevail. The full text of the article in Chinese can be found at https://mp.weixin.qq.com/s/GcYM7gy5kk89Di8KtLrLPg.