Reuters: Regulatory News: UPDATE 1-China unveils tax, finance incentives for new Shenzhen zone

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UPDATE 1-China unveils tax, finance incentives for new Shenzhen zone Jun 29th 2012, 03:40 By James Pomfret and Alison Leung HONG KONG, June 29 | Thu Jun 28, 2012 11:40pm EDT HONG KONG, June 29 (Reuters) - China unveiled tax and financial measures on Friday to create an experimental zone in the southern boomtown of Shenzhen aimed at boosting international use of its currency and links with Hong Kong. China will offer a preferential 15 percent corporate tax rate to select firms in the Qianhai zone, to be developed on reclaimed land in western Shenzhen, and explore allowing cross-border loans to the district. Qianhai would also be an experimental zone for the growing offshore yuan market, China's National Development and Reform Commission, the top planning agency, said at a news conference in Hong Kong on the eve of the 15th anniversary of the former British colony's return to China. The plan enlists Shenzhen, site of the original market-economy reforms that more than 30 years ago began China's rise to its position now as the world's second-biggest economy, to help drive a new wave of financial reforms aimed at reinvigorating growth. China's factory sector shrank in June for the eighth consecutive month according to a preliminary manufacturing survey by HSBC. Premier Wen Jiabao's 2012 economic growth target of 7.5 percent would, if realised, be the lowest since 1990. China hopes the yuan will one day attain global status similar to the dollar, and aims to turn Shanghai into a financial hub on a par with New York and London by 2020. "(China) will establish a national financial services experimental model window to the world," said NDRC Vice Chairman Zhang Xiaoqiang. The plan includes offering support to Hong Kong and Macau companies to operate wholly owned telecoms firms in Qianhai, paving the way for operators such as Hutchison Whampoa and PCCW to offer services on the mainland. Link this Share this Digg this Email Reprints

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