Qianhai test zone approved with 1.5b yuan in funding

Qianhai Bay economic zone has been officially approved as an experimental area for service sector reforms and is expected to receive 1.5 billion yuan from the central government over three years starting in 2012, Shanghai Securities News (SSN) reported Monday.

Located in Shenzhen of South China's Guangdong Province, this economic zone, officially known as Qianhai Shenzhen-Hong Kong Modern Service Sector Cooperation Zone, has received 460 million yuan ($73.6 million) from the central government and will get 1 billion yuan more in the next two years. The Shenzhen government has also funded Qianhai 1 billion yuan, said the report.

The funds will be provided in various modes, such as equity investment and discount loans, to back companies who have registered in Qianhai or launched programs that are related to financial, logistics and IT service industries, according to SSN citing anonymous sources.

Besides being financed by the central government, Qianhai was also appointed as the only place where offshore yuan can flow back freely to the Chinese mainland.

Meanwhile, the corporate income tax rate in the area has been reduced from 25 percent to 15 percent, Cao Hailei, the spokesperson of the zone, told the Global Times earlier this month.

According to an announcement the State Council posted on its website on July 3, more favorable policies are expected to apply to Qianhai than to any other economic zones so as to strengthen the cooperation between nearby Hong Kong and the mainland. This is attracting many companies from the modern service sector to invest.

DHL Global set up an integrated logistics center in the port area of Qianhai on July 18.

On the same day, the Hong Kong-based China Merchants Group, the main operator of this port, announced it would invest another 20 billion yuan over the next five years.