Delta free trade zone’s pros outweigh cons, deputy says
Putting Macau, Hong Kong and parts of Guangdong together in a free trade zone will be more of a help to Macau than a hindrance, according to a Macau deputy in the National People's Congress (NPC), Lao Ngai Leong.
But Mr Lao says allowing duty-free shopping in the free trade zone could make it unnecessary for mainland shoppers to visit Macau, where their money is fuelling the boom in retailing.
The Chinese-language Shanghai Securities News reported on Tuesday that the proposal to set up the free trade zone had been submitted this month to the State Council, or cabinet, for its consideration.
The newspaper quoted unidentified sources as saying the free trade zone would expand service industries and spur financial reform.
The zone would have fewer restrictions on outside investment than the Shanghai Free Trade Zone, the newspaper said.
The zone would experiment with refunding on departure the tax that outsiders, including people from Hong Kong, Macau and Taiwan, paid on consumer goods they bought in the zone.
Under the policy, a list of duty-free consumer goods would also be available for mainland residents shopping there, similar to an arrangement in effect in the island province of Hainan, Shanghai Securities News noted.
“If this measure is taken, it may disrupt the shopping patterns we are used to see among tourists that come here from the mainland,” Mr Lao said.
“But I believe the overall benefits will outweigh the competition,” he said.
Mr Lao is also a businessman and Gongbei border customs post supervisor.
He said the free trade zone would make crossing borders simpler for people and goods, which could stimulate the flow of tourists and merchandise into Macau from the mainland.
“Macau’s free port status will always be there. We don’t have foreign exchange controls and there are few restrictions on capital flows,” he said. “So we would still have a competitive edge under this free trade zone plan.”
The Shanghai Securities News said the free trade zone would make it as simple to get goods transported overland through customs as it was to get goods transported by air or sea through customs.
The newspaper said ships registered in Hong Kong or Macau that called in other ports in the zone would incur lower tax and costs.
It said Macau and Hong Kong and Macau banks would be encouraged to lend in yuan to Hong Kong, Macau or Taiwan companies operating in the free trade zone.
Guangdong already has three special economic zones: Qianhai near Shenzhen, Nansha in Guangzhou and Hengqin Island.
The Pearl River Delta free trade zone would bundle these zones together with the Guangzhou Baiyun Airport economic development zone, mainland media have reported.
A spokesperson for the Guangdong Provincial Development and Reform Commission told Business Daily that it had yet to be decided whether Baiyun Airport would be part of the zone. The spokesperson declined to comment on the Shanghai Security News report.