Hong Kong businesses should be allowed to establish offshore operations in special zones in Shenzhen, enabling them to operate under Hong Kong law while encouraging capital inflows and outflows, an expert suggested at a forum on Friday.
Such a special arrangement would allow Hong Kong-registered companies to operate in the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone as offshore entities, said Xiao Geng, director of the Institute of Policy and Practice at the Chinese University of Hong Kong’s Shenzhen campus. This would make them subject to supervision by Hong Kong regulators under a mandate from Shenzhen authorities, he said at the Qianhai Forum in Shenzhen.
Offshore capital is increasingly attracted to China’s emerging industries, including cross-border e-commerce, which are predominantly based onshore, Xiao said, adding that investors often prefer to keep their funds offshore.
Experts and former politicians at the forum called for more reforms to help integration, from capital markets to technology innovation.
“I believe Shenzhen and Hong Kong should establish a hub, but not just an ordinary research hub,” said Gu Shengzu, an economist and former politician. “It should be an international hub integrating large enterprises, technological innovation and talent.”
