Shenzhen to reprise role as vanguard of China’s financial reforms with its pole position in Greater Bay Area

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Shenzhen’s strengths in many areas put it ahead of other cities in the Greater Bay Area to take the lead in financial deregulation that will facilitate free trade and cross-border capital flows

Shenzhen has mapped out its own blueprint for financial services to promote integration in the bay area

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A light show performed with 826 drones to celebrate the 40th anniversary of the establishment of the Shenzhen Special Economic Zone was held in Shenzhen on August 26. Photo: Xinhua

Zhang Shidong

Published: 8:00pm, 15 Sep 2020Updated: 8:00pm, 15 Sep 2020

Shenzhen, the policy test bed for China’s reforms and economic liberalisation for over four decades, now finds itself at the forefront to turn the Greater Bay Area (GBA) into the vanguard of the country’s deregulation.

The former fishing village has turned into the wealthiest city in Guangdong province over the period and is dubbed China’s Silicon Valley for its cluster of technology giants based there. As the closest GBA city to Hong Kong – separated by a 15-minute high-speed train journey – Shenzhen has the best competitive edge over other cities to take the lead.

While Beijing has recently unveiled a slew of measures to further liberalise the financial industry, such as cross-border sales of insurance and wealth management products, to support the GBA initiative, Shenzhen has rolled out its own 50-point blueprint for revamping the financial services industry to better promote trade and capital flows with investors based in Hong Kong and overseas.

These include further opening of the interbank and bond markets, support of Hong Kong and Macau financial institutions to start cross-border securities and futures businesses, and encouraging insurance firms to set up in Shenzhen.

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“Shenzhen is actually ahead of other GBA cities at least in the mainland,” said Wang Chen, a partner at Xufunds Investment Management. “It’s positioned by the government as the financial centre in southern China and has a stock exchange. If Beijing wants to put in place some preferential policies such as free cross-border capital flows in the GBA on a trial basis, Shenzhen will be the first platform for that. That’ll make Shenzhen even more competitive.”

Shenzhen’s financial infrastructure makes it the obvious choice to take the lead in the further opening up of the nation’s financial sector and capital market. The city is home to one of China’s two main stock exchanges, where the listings of new-economy companies significantly outnumber those on the bigger Shanghai bourse.

Shenzhen to reprise role as vanguard of China’s financial reforms with its pole position in Greater Bay Area

Shenzhen’s strengths in many areas put it ahead of other cities in the Greater Bay Area to take the lead in financial deregulation that will facilitate free trade and cross-border capital flows Shenzhen has mapped out its own blueprint for financial services to promote integration in the bay area