Qianhai land development begins, further yuan liberalization awaits

Shenzhen Qianhai Development and Investment Holdings Co (SQDI), a company wholly owned by the Qianhai Bay economic zone in Guangdong Province, announced the start of its operations over the weekend, marking a step forward for China's financial reform.

"The company will step up land development and infrastructure construction in the Qianhai zone, advance market-based development and operation in the zone and improve efficiency," SQDI chairperson Zheng Hongjie said at the firm's opening ceremony Saturday.

Shenzhen Qianhai Development and Investment Holdings was incorporated in December 2011 with a registered capital of 150 million yuan ($24.12 million). It is wholly controlled by Shenzhen's financial hub, the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone.

"After preparation and a trial run lasting more than a year, the company is now formally operating and will focus on two types of land development, as well as investment in and construction of large projects," Cao Hailei, a spokesperson for the Qianhai zone, told the Global Times Sunday.

In 2013, the company plans to invest 2.5 billion yuan in projects entrusted by the government and another 500 million yuan in projects directly obtained from the market, according to Xinhua News Agency.

Currently, the company has 27 construction projects underway and is a major borrower under cross-border loan contracts, Cao said.

In January, a total of 15 banks in Hong Kong agreed to provide cross-border loans totaling about 2 billion yuan to companies in Qianhai.

Ten lenders including Bank of China (Hong Kong), HSBC Holdings and Standard Chartered Bank signed cross-border yuan loan contracts with SQDI.

"As a large borrower of cross-border yuan loans, SQDI offers a platform for further opening the Chinese mainland's capital accounts and advancing the country's effort to internationalize its currency," Yu Fugong, director of the Research Department of Economics at the Party School of the CPC Guangdong Provincial Committee, told the Global Times.

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