Luo Songsong

    songsongluo@126.com

    ALTHOUGH billions of yuan in Chinese currency has gone to offshore markets from Qianhai, some Chinese economists doubt whether the 15 square-kilometer Shenzhen-Hong Kong modern service cooperation zone can remain at the forefront of China’s financial reform after it has made several breakthroughs.

    Chen Zhiwu, a famous Chinese economist and professor from Yale University, said companies entered the area to take the advantage of a series of preferential policies, but the enterprises won’t benefit from the favors forever since the monopoly policy advantage will hinder further financial innovations in the long run.

    “Thanks to strict control by the Central Government, Qianhai has been the spearhead of China’s financial reform, but it could lose its momentum once the area receives too many exclusive interests,” Chen said during a business forum in Shenzhen organized by Excellence Group on Tuesday.

    Chen said it is a growing trend for large global financial companies and organizations to merge with smaller ones. “Qianhai should make the best of the preferential reform policies, thus increasing the number of companies that can compete in the business world.”

    Ba Shusong, vice director-general of the Research Institute of Finance of the Development Research Center of the State Council, said the future of Qianhai depends on its close financial ties with Hong Kong, where Chinese currency can float round the benchmark freely.

    “Hong Kong as an offshore renminbi market will play a more important role to make the yuan a global currency, which can provide valuable experience for the domestic financial industry. Qianhai is crucial for realizing the government’s vision,” said Ba, who worked for the top economic chamber of Hong Kong for about six years.

    Both economists agreed that defects or weaknesses in China’s existing financial system give Qianhai the impetus to make innovations and seize opportunities.

    “Aside from traditional financial service like bonds, securities, loans and stock markets, emerging financial businesses today focus on wealth and fund management,” Chen said. “Qianhai can become China’s major financial center if it can boost the consumer and family finance sectors and help small and medium-sized companies raise money,” added Chen, who proposed the set-up of a secondary mortgage market for such companies.