The Dream Factory of China

　　Qianhai is a window to demonstrate the open up of the Chinese financial industry and the cross-border Renminbi (RMB) pilot zone approved by the State Council. Financial innovation is important for Qianhai and other Free Trade Zones (FTZs) to show their uniqueness. Taking advantage of Hong Kong as a financial centre, Qianhai creates a Shenzhen-Hong Kong capital market through financial opening up and innovation. Such collaboration energize Hong Kong’s financial industry.

　　Qianhai is at the forefront of financial innovation. According to the Qianhai Authority, 90% of Shenzhen’s internet finance enterprises are based in Qianhai. At the same time, Qianhai’s cross-border RMB loans business is also developing rapidly. As of the end of March 2015, the total filing amount recorded was RMB91.18 billion, while accumulated withdrawals reached RMB22.83 billion. Recently, there was a significant breakthrough in the issuing of RMB bonds in Hong Kong as Qianhai Financial Holding Co., Ltd. successfully issued one billion RMB bonds in Hong Kong, drawing major attention from investors.

　　The number of foreign-invested equity investment enterprises in Qianhai has increased to 63, with combined overseas reflows of RMB 3.5 billion. Qianhai’s overseas investment pilots for eligible domestic investors have also made good progress. The first batch of eight eligible pilot enterprises has invested a total of one billion US dollars. In addition, Qianhai’s macro-prudential debt management pilot has been launched. The first batch of five Qianhai enterprises has completed debt registration and signed contracts valued at 200 million US dollars. Qianhai has also accelerated the pace of agglomeration – as of the end of March, it boasted nearly 15,000 financial companies and financial supporting service institutions, accounting for 56% of the total companies in Qianhai. Moreover, as of April, among those business and commercial businesses registered in Qianhai , 986 of them carry “internet finance” in their company names, 49 are payment companies, 11 are crowdfunding companies, 63 are data companies, 6 are credit companies, and 18 are element trading platforms, accounting for 90% of all internet finance enterprises in Shenzhen. There can be no doubt that Qianhai is a vital zone driving financial innovation.

　　Qianhai plays three important roles in the internet finance industry: as a pioneer of industry innovation, as a zone operating within a standardized legal framework, and as a cross-border mobile data exchange pilot zone. It includes WeBank, 360.cn, Ping An crowdfunding, Tencent credit, the Zhong Shun Yi online trust platform, an agricultural trading center, and the China Emissions Exchange. The latter, the only open pilot of its kind in China, currently allows overseas investors to participate in investment transactions.

　　As Hong Kong’s financial and technology industries always connect with international markets, it is believed that we play an important role in securing open standards, platforms and interfaces for internet finance. Successful co-operation between Shenzhen and Hong Kong in internet finance, including demonstrating innovation across information, accounts, technology and culture, will become the best  practice model for other FTZs. In line with China’s ‘One Belt, One Road’ policy, Qianhai develops various new business models and promotes to other economies.

　　How Hong Kong enterprises take advantage, therefore, of Qianhai’s unique financial opportunities and innovations, including its favorable interest and exchange rates, and its open capital projects, to produce better investment returns over effective periods, is key to integration between Shenzhen and Hong Kong.

　　Qianhai connects a complete financial industry value chain which includes both upstream and downstream industries. The biggest challenges faced by Qianhai involve how to continuously bring forth new ideas and attract more large enterprises and their related businesses to Qianhai, and thus to diversify the value chain that , create new core competencies for Shenshen-Hong Kong Cooperation and strengthen the cluster effects.