The administrative organization for the Guangdong-Macao in-depth cooperation zone in Hengqin, an island in Zhuhai, was officially unveiled on Friday, a further step towards carrying out China's master plan to diversify Macao's development through closer integration with the mainland.
To enrich the practice of One Country, Two Systems and offer a driving force for Macao's long-term development, China announced on September 5 a general plan for building a Guangdong-Macao in-depth cooperation zone in Hengqin.
New industries in new space
Hengqin, which is located in the southern part of Zhuhai City in Guangdong Province, is the city's largest island and just five minutes by shuttle bus from Macao.
Hengqin free trade zone was set up in 2015 and the island later became a key hub for the Greater Bay Area.
By the end of 2020, the once-remote island had become a modern city with a total GDP of 46.8 billion yuan, according to official data.
The plan defines the cooperation zone, which covers a total area of 106 square kilometers, three times the size of Macao, as a new platform to boost the special administrative region's economic diversification, and a new space to facilitate Macao residents' life and employment.
Macao's small space limited the development of many industries, therefore Macao asked the central government for additional land in Hengqin and received permission, Chief Executive of Macao Ho Iat Seng said in an interview with China Media Group broadcast on September 12.
As the world's gambling hub, Macao's single economic structure made it vulnerable to turbulences such as the pandemic. Official data showed that its GDP shrank by 56.23 percent year on year in 2020 when tourist numbers dropped 80 percent compared to 2019.
The over-dependence on gambling and tourism also discourages young people from joining promising industries such as technology.
The cooperation zone plan is designed to solve these problems by promoting four major industries, including tech and high-end manufacturing; traditional Chinese medicine and other signature businesses of Macao; industries related to culture, tourism, conventions, exhibitions, business and trade and also modern finance, especially with Portuguese-speaking countries.
To encourage talents and businesses to join the cooperation zone, generous tax cuts and other preferential policies are offered.
The enterprise income tax rate will be 15 percent for companies in Hengqin, compared with the normal 20-25 percent on the Chinese mainland. Personal income tax for Macao residents working in Hengqin will be the same as the rate in Macao, which is lower than the rate on the Chinese mainland.
New management structure
As an integration platform, the Hengqin zone adopts a co-management system.
Ma Xingrui, the governor of Guangdong, and Macao's chief executive Ho have been appointed as the co-leaders of the Hengqin zone administration committee, which will make major decisions on plans, policies and personnel appointments.
Under the administration committee, there is an executive committee responsible for business promotion, land development and project operation. The executive committee will be led by officials appointed by the Macao SAR government and participated in by officials from Guangdong and Zhuhai.
The management mechanism showed that the Hengqin zone will fully consider Macao's needs and requests, according to a research note from China Merchants Securities.