Shenzhen marks two decades of economic thrust

By Mary Kwang, The Straits Times, 15 November 2000

Celebrations dampened by concern that the city could lose its top-notch position as a Chinese business hub and the vanguard of reforms

GUANGZHOU—Shenzhen, which yesterday celebrated its 20th anniversary as a Special Economic Zone (SEZ), continues to play its pioneering role with the imminent establishment of China&39;s second board to nurture fledgling high-technology enterprises.

At the same time, however, recent developments have dampened the city&39;s celebratory mood, signalling that China&39;s oldest SEZ could be losing its sterling status as the vanguard of Chinese reforms.

In particular, Shanghai is also seen as a formidable rival in that the eastern industrial hub has given notice that it wants to be the place for the central government to introduce any new policy to prepare China for accession to the World Trade Organisation.

The central authorities have ordered the relocation of Shenzhen&39;s main board to Shanghai.

The SEZ has also been hit by rumours that its own home-grown insurance company, Ping An Insurance, is set to move its headquarters to Shanghai.

The story of Shenzhen, however, is about the growth of a former farming and fishing backwater into a labour-intensive base for Hongkong manufacturers first, and then becoming the country&39;s leading information technology hub with residents boasting the highest per capita income in China.

Vice-Mayor Li Decheng, speaking to reporters earlier this week, said: Shenzhen must keep adjusting and has opted for high technology, focussing on information technology (IT) and telecommunications.

Preparations for the second board were ready but for the necessary legislation, he said.

Losing an asset to Shanghai is a sore point with Shenzhen officials, going by his remarks. Capital flows to Shanghai will bring difficulties to Shenzhen, he said.

He also said Shenzhen would continue to maintain existing mainboard counters for the next five years to allow the second board to grow and develop.

He also said that new initial public offerings would continue to be accepted on the Shenzhen bourse.

This is in contrast with remarks made last week by Shanghai Mayor Xu Kuangdi who had said that new listings had been stopped in Shenzhen since September.

Shenzhen is fighting back to stay ahead.

According to Mr Li, more than 20 enterprises have lined up to float their shares on the new board.

The enterprises had intended originally to list in Hongkong or on the mainboard, such as Beida Kexin, a biotechnology company.

He also denied rumours that Ping An would move its headquarters to Shanghai, saying that incentives in Shenzhen were more attractive than in Shanghai.

Mr Li said that yesterday&39;s celebrations were held three months after the actual anniversary of the founding of the SEZ because of fears that the typhoon season in August could rain on such activities.