Edmund Ho and Guangdong Provincial Party Committee Secretary Zhang Dejiang want to join forces to explore the development of Hengqin, the largest of Zhuhai's 146 islands, which with its 96 square kilometres is roughly three times the size of Macau and which lies just off Coloane. In December in Guangzhou, Zhang, an advocate of Pan-PRD co-operation, said that the Guangdong government is planning to develop Hengqin as a platform for Guangdong/Macau co-operation. An earlier plan had been proposed to develop the island cooperatively by the "9+2" (the region including the nine provinces of Guangdong, Fujian, Jiangxi, Hunan, Guangxi, Hainan, Guizhou, Yunnan and Sichuan and the two administrative regions of Hong Kong and Macau), but because Macau's booming economy was becoming more and more narrowly based on the gaming industry, the new idea is for Guangdong to team up with Macau as a way to support Macau's tourism and diversify its economy.

Creating more jobs
Zhang also wants the two governments to push the development as a way to boost employment in Guangdong, and his provincial government prepared an overall development plan for Hengqin.
Ho took up the plan at a meeting in Zhuhai with CPC Zhuhai Municipal Committee Secretary Deng Weilong, who said that the exploration of Hengqin will solve the problem of Macau's narrowly based economy in the short and mid-terms and promote economic diversification in the long term. With proper planning, Hengqin could create a very different kind of economic environment from that of Macau, and provide more opportunities for Macau workers and investors. The two governments will be cooperating in other ways, as well, such as transport infrastructure, port service co-operation, water supply, food safety, environmental protection and technology cooperation

Not a perfect solution
But Edmund Ho pointed out that Hengqin's development will not directly drive Macau toward economic diversification, because at the development's early stage, Macau's service sector companies and small- to medium-sized enterprises may leave Macau and flock to Hengqin for business opportunities, leaving Macau more dependent on tourism than ever. Nevertheless, he pledged the government's full support for the development.
Since the previous Guangdong-Macau Joint Conference, heated discussion on Pan-PRD exploration of Hengqin has cooled down. The Beijing Investment and Consultancy Company, entrusted by the Development and Reform Commission of Guangdong province, drafted the Proposal of the Development of Pan PRD (Hengqin) Economic Co-operation Zone, which suggested the setting up of a Pan-PRD/Hengqin economic co-operation zone with permission to start Reminbi offshore businesses there offering tax incentives, but there has been less discussion recently about developing Hengqin as an offshore trading and financial platform through the cooperation of Pan-PRD bodies.

Laying the foundation
On November 28, the Outline of Zhuhai Hengqin Overall Development, submitted by the Development and Reform Commission of Guangdong Province and the Government of Zhuhai, was approved in a state executive meeting. The plan aims at turning Hengqin into a platform for co-operation and services for the Pan-PRD region, and proposes making it a model of innovative ecological development for the country. With its multi-dimensional economic complexity, Hengqin can remain on track with international trends and standards of sustainable development, so it has the potential to become a hub of innovation and creativity. The plan stipulates that Hengqin's main focus will be scientific and technological research, hi-tech industry, convention and exhibition as well as leisure travel with logistic and trade, training and exchanging, culture and creative industry, business service and ecology community as secondary functions.
The outline proposes to develop Hengqin as a centre for technical innovation and a place PRD co-operation. According to one source, a Hengqin Development Work Collaboration Leading Group has been established under the Zhuhai provincial government. Meanwhile, regulations for Hengqin's projects for investment and guidelines for the island's industry development have been formulated, both moves to entice enterprises with advanced technical capabilities to invest in Zhuhai.

Huge investment from Macau
Nevertheless, it could that the idea of a Pan-PRD economic co-operation platform is giving way to a plan for the development of Hengqin's industrial potential to meets the needs of the PRD, especially those of Zhuhai and Macau.
Macau and Hengqin are closely linked geographically and historically, and ties between them are stronger than ever right now. Las Vegas Sands announced in September that it had signed an agreement with Guangdong authorities to develop a resort on Hengqing Island, and in January, the company again was in the news saying the government of the city of Zhuhai had had set up a committee to help "advance" its development plans.
Not long after Las Vegas Sands announced its US$2 billion resort project, Galaxy Entertainment and SJM announced they would invest RMB 11 billion and RMB 6 billion respectively on developing Hengqin into a resort destination. These investors will probably be more effective with their projects than those of the 9+2 would be if things had gone as previously planned.
Closer ties between Zhuhai and Macau seem inevitable, given that within a decade or two both will be closer connected both to each other and the rest of China by the planned Intercity Railway, which will take only minutes to reach Guangzhou from Macau. In any case, the exploration of Hengqin and the sustainable economic development of Macau are inseparably linked, and developing the island of Hengqin together will no doubt bring closer integration of Macau and Zhuhai.

Still waiting for Hengqin

Las Vegas Sands Corp denied a report claiming it obtained a long-delayed approval from Beijing to build a US$2 billion resort and convention complex on Zhuhai's Hengqin island. In a statement issued last month, Las Vegas Sands maintained that the project remains subject to government approvals, but that in a positive step forward the Zhuhai city government had formed a special co-ordinating committee to advance the resort project. Executives previously said that the project enjoyed support from municipal and provincial governments. The company was responding to a research note issued in New York by an analyst at Wall Street brokerage Jeffries & Co citing unidentified executives as saying the Hengqin project had received final approval from the central government and would break ground before Lunar New Year. The report sent Sands shares soaring 11.3 per cent to an all-time high of US$102.81 in New York in January. The company has earmarked more than US$15 billion for casino-related projects in Macau and Singapore and plans initially to invest about US$400 million during in the 18 months after breaking ground on the non-gaming resort in Zhuhai, which is due to include convention facilities, hotels, holiday villas, a golf course and marina. Investment on Hengqin could rise to as much as US$2 billion in the next five years, and up to US$10 billion in the next decade, Las Vegas Sands president William Weidner said in November last year. At that time he said the approval process had reached the final stage and was expected to be finalised.

by Pi Ye