What benefits will accrue to the region if the central government approves the Pan-Pearl River Delta and Hengqin Island Economic Cooperation plan?
Ding Li – A lot of preparation work has done with regards to Pan-Pearl River Delta cooperation, including the communication of information. However, there still needs to be more solid work completed for the implementation of cooperation. Currently, the plan has not been approved by the national government. There are indeed many aspects of the plan that involve the creation or the amendment of official policy by the central government. The plan is undoubtedly bold. If it is approved, many problems in Guangdong province and Macau can be solved. Guangdong province and Hong Kong as well as the nine provinces and regions will benefit. It will be a “win-win'' or “multi-win'' situation.

What do you think about the idea of turning Hengqin Island into a renminbi offshore financial center?
I can only express my point of view since I haven't taken part in the formulation of the plan. It is said that there isn't a complete renminbi reflow system, so that 150 billion renminbi stagnates in Hong Kong annually. Capital exchange among Guangdong province, Hong Kong and Macau is not very efficient. An offshore clearing center also relates to the free exchange of renminbi under the current account, which is not possible at this time. If the government approves the policy, Guangdong province will become the first region in the nation with a renminbi offshore center. It will be a big present for the Guangdong Province and the Pan-Pearl River Delta cooperation area. It is worth considering the following: if Hengqin Island is developed as an offshore center in an orderly manner, and if that development is successful, what impact could it have on the financial reform process nationwide?

Why do you think the government wanted to make Hengqin an offshore financial center rather than setting up an offshore center in Hong Kong or elsewhere in Guangdong Province?
Because Hengqin is an island it is in a relevantly closed economic state. It'll be easier for the government to control even if problems occur; potential problems will not migrate to the rest of the mainland so quickly. Although there is large amount of stagnated renminbi in Hong Kong and Macau, it is difficult to control a renminbi offshore center in these places under the policy of “One country, two systems''. Hengqin Island can play the role as a transitional region.

Will the development of Hengqin bring any remarkable benefits to Guangdong province?
It is notable that only Guangdong province and Macau are so far involved in the development of Hengqin Island. Discussions have mainly focused on developing tourism and whether the gaming sector should be introduced to the island. However, the development of Hengqin Island has already been put in the Pan-Pearl River Delta “9+2” background.
Hengqin Island will gather benefits from the nine provinces and Hong Kong and Macau.
It is believed that this plan won't have a big direct influence on Guangdong province, but will instead help facilitate cooperation in the Pan-Pearl River Delta region and help strengthen the relationship between Guangdong province and the nine provinces and regions.

by Lu Pin in Guangzhou