When the State Council designated Hengqin island as a special zone in April 2009, Macau thought it had won the lottery.
Here was 106.5 square kilometers of land, just 200 meters away at its closest point, three times the area of Macau, with just a few thousand inhabitants. At last it would have free land – like the New Territories and Lantau for Hong Kong – to expand and build the many services and facilities for which there was no space at home.
Six years on and the transformation has been dramatic – it is home to the world’s largest marine theme park, a spanking new university with room for 10,000 students and a business district that has, according to official figures, attracted 866 financial companies with registered capital of 137 billion yuan (US$22.1 billion).
Its GDP rose from 285 million yuan in 2009 to 5.8 billion yuan in 2014 – a more than 20-fold increase.
Macau residents look over the narrow stretch of water and see these giant buildings rising out of the ground, like dragons out of the sea.
On April 23, the governments of Zhuhai and Macau formally launched the Hengqin Pilot Free Trade Zone (FTZ), one of three in Guangdong, together with Nansha and Qianhai/Shekou.
They signed an agreement designed to bring the two sides closer – another step in the integration of the special administrative region into China 16 years after the handover.
Niu Jing, director of the Hengqin management committee, said that, by the end of this year, people with Macau car registrations should be able to drive freely through the zone – but would need a mainland permit to enter the rest of Zhuhai.
The zone aims to be an ecological model – 70 percent of the land to remain untouched or with restrictions on building, with low pollution and clean energy.
All this is good news for Macau – but its benefits have been limited.
Its greatest benefit is the new campus of University of Macau, on a greenfield site of 1.09 sq km, 20 times larger than its previous site in Taipa; the SAR government is paying 1.2 billion patacas for a 40-year lease.
On the campus, Macau law applies; students and faculty have the same internet access as they did before and do not pass through immigration.
Then there is a 4.5 sq km area for a joint Guangdong-Macau industrial zone; the Macau government has proposed 33 projects in the park, with a total investment of 140 billion yuan.
And many Macau residents have bought properties in the apartment blocks that have sprung up on the coast facing Taipa; average prices are less than half of those in Macau. From Nov. 20 last year, the Lotus Flower Bridge border between Taipa and Hengqin is open 24 hours a day, making commuting easy.
But Hengqin is a national, not a Macau, project. Investors from the mainland and Hong Kong want to buy its land and property, whose prices are already the highest in Zhuhai.
Initially, there was talk of turning the zone into an “education hub” with institutions other than the University of Macao. But this was soon forgotten, when officials realized how much larger the economic returns from other sectors are.
Shun Tak, for example, has invested 721 million yuan to buy 23,834 square meters of land to build an office, hotel, commercial and service apartment complex in Hengqin close to the border. Galaxy Entertainment is investing 10 billion yuan in a luxury Maldives-style holiday resort on 2.7 sq km in the southwest, with a shoreline of 2.5 sq km. The land is being rapidly gobbled up.
The SAR government has asked for a further 10 sq km – but this would have to be reclaimed from the sea.
In April, it said that it was considering the purchase of land to build medical clinics, nurseries and retirement homes. Hengqin officials were polite but said the SAR itself could not buy the land and the purchaser would have to be a mainland legal entity, company or civil association.
What is more likely is that they will be built in Zhongshan or Jiangmen, cities where land is cheaper and which are not FTZs.
Close to Hengqin, if not physically in the zone, is a giant exhibition and business center, complete with five-star hotel and office space. It is competing for the same convention and meeting events that Macau hotels want, to reduce their dependence on gambling.
The new FTZ will, no question, bring new space and opportunities to Macau people and companies. But they will have to share it with other players, many bigger and more powerful than they are. The dreams of 2009 have not been realized.
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