Hong Kong, Shenzhen border zone blueprint hopes to offer best of both worlds

Bigger, better, smoother – that is the dream of a border zone blueprint that will unite the strengths of Hong Kong and Shenzhen with firms and talent able to enjoy the best of both worlds in the areas of innovation and technology, taxation, legal protection and funding support.

The plan, introduced by the State Council on Tuesday, is a move by Beijing to put pressure on Hong Kong and Shenzhen to speed up cooperation at the site in the Lok Ma Chau Loop, according to a lawmaker and two industry experts.

“The blueprint has provided a clear indication on how both sides should speed up their cooperation, which has been rather slow,” lawmaker Duncan Chiu, representing the information technology sector, said on Wednesday.

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The plan for the area, located near the border with mainland China, outlines 30 measures ranging from providing technological and funding support for tech projects, tax incentives, intellectual property and legal protection, as well as easier pathways for companies and talent to conduct business and work in the zone.

It also aims to leverage the advantages of the two cities, with some Hong Kong systems, such as those for taxation and arbitration, to be adopted over the border.

Chiu said the blueprint put forward Beijing’s key performance indicators (KPIs) for both cities to speed up their joint development of the area, which is envisaged as a border cluster of top laboratories and research institutes for advanced technologies.

“Now the blueprint has basically aligned the KPIs for both sides, effectively putting pressure on both Hong Kong and Shenzhen to implement the stated initiatives together.”

The lawmaker said he expected both sides to roll out more trial schemes in areas such as cross-border data sharing and usage, as local telecom companies were allowed to set up shop in Shenzhen’s customs supervision zone under the plan.

“I hope that clinical trial data and the research outcomes could be shared between Hong Kong and Shenzhen,” he said.

The plan for the area, which is known as the Shenzhen-Hong Kong Innovation and Technology Cooperation Zone, said a collaboration mechanism between the two places should be in place by 2025. The aim would be to attract world-class talent for a research cluster, while an IT park in the zone should be fully developed by 2035 into a leading hub for science and innovation.

Chiu said the timetables were important as they pushed both sides to meet the targets by working closer together.

“In the past, each side had their own KPIs and they didn’t work on the same page,” he said. “With the blueprint setting a clear timetable, both cities need to pick up the pace together to meet Beijing’s vision.”

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Leonard Chan Tik-yuen, chairman of the Hong Kong Innovative Technology Development Association, said the blueprint amounted to directives from Beijing that told both cities to become more integrated.

“Beijing is kind of exerting pressure on both sides to speed up their collaboration for the loop’s development as so far the progress has been really slow with practically nothing being achieved,” he said.

He pointed out that one of the breakthrough measures was the use of Hong Kong’s legal system for intellectual property protection, arbitration and civil proceedings.

“Under the blueprint, the Loop could use the city’s laws to resolve civil disputes and enter into contracts. This is actually another implementation of the ‘one country, two systems’ regime,” he said.

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Kenny Shui Chi-wai, vice-president of think tank Our Hong Kong Foundation, said the blueprint addressed the problems over lengthy approval processes for medical trial projects.

“I hope the National Medical Products Administration in the Greater Bay Area will be given more power to vet new medicine so as to enhance the development of biomedical technology in the Loop,” said Shui, who has a background in innovation and technology.

The cooperation zone, made up of the Hong Kong-Shenzhen IT Park and the Shenzhen IT Zone, is seen as a major driver for the development of an international innovation and technology hub in the bay area.

The area covers both sides of the Shenzhen River, with 300 hectares (741 acres) on the mainland and 87 hectares in Hong Kong.