Comprehensive Policy

Reply by Ministry of Finance and Ministry of Commerce on the Development of Pilot Projects of Modern Service in Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone

To the People’s government of Shenzhen Municipality:
  The Proposal on the development of pilot projects of modern service in Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (Government of Shenzhen Municipality (2012) 63) has been received. The general reply is as follow:
  I.Accelerating the development of service industry is a must for transforming economic development mode, adjusting economic structure and realizing scientific development and also it is an urgent demand for expanding consumption. In recent years, China has formulated a series of policies concerning capital investment and tax break to support the development of service sector. Local governments have also issued specific measures in line with the local conditions. In order to give a full play to the policies issued by the central and local government and to facilitate the building of an effective mechanism to enhance service sector, Ministry of Finance and Commerce have made the decision to establish pilot projects for modern service in Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone.
  II.The suggestions for the development of the pilot projects proposed by Shenzhen government (2012) 63 are generally agreed, that is: to prioritize the upgrading of service sector and the deepening of regional cooperation; dare to be the pioneer and prioritize the development of finance, modern logistics and information sectors by consolidating policy resources and innovating mechanisms and systems; to build a national base for productive service sector and a productive service center with a large coverage; to promote the upgrading of industrial structure in pearl river delta and the cooperation between Hong Kong, Macao and Guangdong; and to explore an effective model for the development of modern financial service. The goal is to, after a 3-year experiment, reach a regional GDP of 40 billion RMB by 2014 with an average growth rate for modern service sector over 50%.
  III.The pilot projects should be conducted on a local level. Ministry of Finance, Ministry of Commerce and other agencies will step up guidance on a macro level and use the existing channels to coordinate the use of fund and to increase the support for pilot areas. Shenzhen needs to improve the policy system for the pilot projects and issue favorable policies in terms of market access, planning, land management and taxation. The local government should enhance the financial support for the pilot projects in line with that of the central government. The use of capital from the central and the local government should be well-coordinated. Subsidies, loans with discounted interest and equity investment should be leveraged to support key pilot programs concerning public interest, industrialization or market applications. The programs that have received the financial support from the central government are not eligible for another grant in general.
  IV.Shenzhen should step up the governance in pilot projects and establish a working group to coordinate and address major issues; to set up dedicated agencies to implement the related work. It should define clear responsibilities of each level and establish an efficient and effective working mechanism so as to give full play to the dominant position of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone and to ensure the well implementation of pilot projects. Also, a reporting system on the implementation situation should be established to report to Ministry of Finance and Ministry of Commerce on a quarterly basis.
  V.The Development of Pilot Projects of Modern Service  in Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone ratified by the Finance Commission and Economy, Trade and Information Commission of Shenzhen Municipality should be implemented. The local authorities should develop a way to manage dedicated funds and projects so as to establish well-defined funding management, allocation and supervision, as well as project application, approval and inspection. The 2012 project planning should be formulated and reported to the Ministry of Finance and Ministry of Commerce. The plan should be announced to the public and can only be implemented when there is no objection.
  VI.After the implementation of the pilot projects, Finance Commission and Economy, Trade and Information Commission of Shenzhen Municipality should step up the supervision over the funding and projects based on the rules and regulations. And the authorities should carry out project inspection and make the payment as earmarked. They should track the performance in time so as to ensure fund well under control and policy performance. The local authorities should also conduct a self-evaluation on the performance of the pilot projects based on relative rules and regulations on a yearly basis and to report the yearly performance and submit the arrangement for the next year to Ministry of Finance and Ministry of Commerce who will conduct an assessment for each pilot project on the basis of local self-evaluation so as to adjust the supporting policies according to the local situation.
  VII.Finance Commission and Economy, Trade and Information Commission of Shenzhen Municipality should actively explore effective models in developing modern services by using the pilot projects as guidance and conclude the learnings timely. The government should strengthen publicity and the impact of policies so as to play a leading role for the national development of service industry.
  Ministry of Finance and Ministry of Commerce
  July 16th, 2012