Hengqin, the special economic zone adjoining Macau, has received approval from the State Council to double its land area and promised a warm welcome to projects from Hong Kong and Macau.
Niu Jing, director of the Hengqin New Area Management Committee, announced it had received approval to reclaim 27.9 square kilometers of sea off the southern tip of the peninsula in Zhuhai, Guangdong province.
That is nearly equivalent to the entire land area of Macau, which is 30.3 sq km, and equal to the 28 sq km of the existing Hengqin Island.
The expansion is necessary because demand for land in the special economic zone has greatly exceeded supply.
“Companies from Hong Kong and Macau can have unlimited use of land in Hengqin,” Niu said.
“The key is to see their projects. Good projects will certainly receive adequate support.”
The committee’s figures show that 222 Hong Kong and 875 Macau firms have invested in Hengqin so far.
Lai Fung Holdings Ltd. (01125.HK) and eSun Holdings Ltd. (00571.HK), both part of Lai Sun Group, a Hong Kong property conglomerate, are investing in an “Immersive Experience Centre” occupying 22,000 sq meters in Hengqin’s Creative Culture City — which involves a total investment of 22 billion yuan (US$3.42 billion) and will include a hotel, performance halls, workshops, an e-sports gaming area and other entertainment facilities.
Shun Tak Holdings Ltd. (00242.HK), a Hong Kong firm that operates hydrofoil services to Macau and has developed residential property there, has invested 721 million yuan in 23,834 sq meters of land in Hengqin.
It is building an office, hotel, commercial and service apartment complex.
Macau casino operator Galaxy Entertainment Group Ltd. (00027.HK) is investing 10 billion yuan in a luxury Maldives-style holiday resort on 2.7 sq km in southwest Hengqin.
Hong Kong people and firms are active in trade, wholesale and retail, finance, culture and creativity, hotels, leisure and tourism in Hengqin.
The official figures show people from Hong Kong and Macau have borrowed more than US$150 million to buy property in Hengqin and applied to conduct cross-border renminbi business exceeding 2.56 billion yuan.
By the end of last month, 14,585 firms had registered in Hengqin.
They included 1,770 financial firms with a registered capital of 183 billion yuan and capital under management of 1.5 trillion yuan.
Tourists from Hong Kong, Macau and overseas account for 10 per cent of the 20 million people who have visited the Chimelong Ocean Kingdom, the world’s largest water theme park, which opened in March last year at the southern tip of Hengqin.
It includes one of the world’s largest aquariums, with rare whale sharks, beluga whales, polar bears and other exotic animals.
Chimelong has announced an investment of 50 billion yuan in five more theme parks to be built on an adjacent site in Hengqin. Its aim is to attract 50 million tourists a year.
For visitors to the area today, these pharaonic figures are hard to visualize.
It remains an enormous construction site, with dozens of apartment buildings and other projects rising out of the ground but few residents.
Despite that, property prices are the highest in Zhuhai, driven by speculators, mainly from the mainland.
“Zhuhai people do not want to live in Hengqin,” said Liang Ling, a taxi driver.
“The prices are too expensive, the transport inconvenient and the supporting infrastructure has not been built yet, like shops, schools and hospitals.
“Some Macao people are moving there, now the border is open 24 hours a day, so they can cross easily.”
In announcing the reclamation, Niu stressed the importance of Hong Kong’s role, saying his committee had set up an office in the city and aimed to attract its residents with a tax rate the same as they pay at home.
“There are many rules and regulations in the mainland which do not exist in Hong Kong and Macau,” he said.
“We are researching this with the aim of drawing up a new list of legal responsibilities.”
The question is whether, in the newly reclaimed area, Hong Kong firms will be given preference.
In the national plan, Hengqin is supposed to be twinned with Hong Kong and Macau, to develop services and industries for which there is no room in the two cities.
But what has happened in reality is that Hengqin has become a national project, attracting capital from all over China.
Hong Kong firms can only invest there if they can outbid companies from elsewhere in terms of price and if the content of their projects meet sector targets set by Beijing.
So it is a new place for Hong Kong people and companies to live in and develop – but not one in which they get preference over others.
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