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Year of Success Sees Nansha New Area Hailed as Cross-Border Pioneer

Many of the innovations piloted in the Nansha New Area, a key cross-border e-commerce hub in the heart of Guangzhou, have now been rolled out nationwide, a clear testimony to its success as it completes its first full year of trading.

Photo: One year on: Celebrations mark the first anniversary of the Nansha New Area.
One year on: Celebrations mark the first anniversary of the Nansha New Area.
Photo: One year on: Celebrations mark the first anniversary of the Nansha New Area.
One year on: Celebrations mark the first anniversary of the Nansha New Area.

Launched in April 2015, the Nansha New Area has now successfully piloted a number of reforms and innovations, all of which have been designed to promote investment and increase trade efficiency. It has also led the way in terms of ensuring compliance with a variety of international investment and trade requirements.

As a sign of its success, the Ministry of Commerce nominated Nansha's cross-border e-commerce supervision model as one of its eight Cases of Best Practice nationally. In another telling testimony, 25 out of the 27 cross-border trader initiatives currently active in Guangdong were trialled in the Nansha New Area. In many cases, they were also the first initiatives of their kind to be implemented anywhere in the country.

Overall, four particular initiatives – Hong Kong Connect, One Stop Processing, Cross-border E-commerce Product Quality Tracking and Smart Inspect – have been seen as having a particular impact.

Hong Kong Connect

This particular business platform has led the way in allowing companies in Nansha to fully access Hong Kong's business services. Jointly established by the Chong Hing Bank, the Yuexiu Group and Nansha Investment Consulting, the initiative enables Hong Kong companies and individuals to handle all of the procedures related to setting up business in Nansha without ever having to leave Hong Kong.

One-Stop Processing

The adoption of this approach has hugely simplified the licensing and certification needs of most businesses. With the exception of food businesses and enterprise investment filing certificates, applicants need only login twice to secure all of the 15 licences and certificates they require. Often, the whole process can be completed within a working day. As a result, the Nansha New Area is now said to lead the country in terms of its processing speed for multiple business permits.

Cross-border E-commerce Product Quality Tracking

The adoption of this facility means that consumers only need to input their order number, ID number or courier checking number in order to access information related to their cross-border e-commerce purchase of goods. The information available includes the commodity name, quantity, item number, declared place of origin, name of manufacturer and the entry port. As of February 2016, more than 140,000 searches had been made using the service.

Smart Inspect

This innovation has cut the clearance time for imports by around 70%, while there is virtually zero waiting time in the case of exports. Under the terms of this new 24-hour a day, paperless express clearance system, all inspection fees are borne by the government, provided that nothing is found to be wrong with the goods in question.

Overall, given these four notable innovations, as well as its general progress, the Nansha New Area is now seen as benefiting from its advantages in four key ways – cross-border e-commerce, shipping logistics, financial innovation and technological innovation.

Cross-border E-commerce

As of the end of February this year, a total of 774 cross-border e-commerce companies had registered with the Nansha Entry-Exit Inspection and Quarantine Bureau and commenced operation. Of these, 392 are cross-border e-commerce companies, 299 are e-commerce platforms, 30 are foreign trade comprehensive service companies, 10 are payment companies, 23 are warehousing companies and 20 are logistics/delivery companies.

In total, cross-border e-commerce operators in Nansha handled online bonded imports worth more than Rmb1.38 billion in 2015, a 45-fold increase over the previous year. A number of additional companies have now started operating in the new area, including Hong Kong's Four Seas Mercantile Holdings Cross-Border E-Commerce Direct Sales Centre and Travelnomall, a business established by Fok Kai Man, Vice-president of the Fok Ying Tung Group.

Photo: Travelnomall: A new addition to Nansha.
Travelnomall: A new addition to Nansha.
Photo: Travelnomall: A new addition to Nansha.
Travelnomall: A new addition to Nansha.
Photo: Hong Kong e-commerce goods on show.
Hong Kong e-commerce goods on show.
Photo: Hong Kong e-commerce goods on show.
Hong Kong e-commerce goods on show.

Shipping Logistics

The Nansha Port had a container throughput of 11.77 million TEUs in 2015, making it one of the top 12 ports in the world. One year on from the establishment of the Nansha New Area and the port has increased its number of international routes to 74. In addition, 10 dry ports have been opened, five shuttle bus feeder lines have been introduced, and 1,200 new shipping logistics service companies have been established – three times the number in operation prior to the approval of the pilot FTZ.

Additionally, a total of 575 ships, worth Rmb1.958 billion, changed hands at the Guangzhou Shipping Exchange. Nansha also completed its first cross-border settlement of capital via a third-party platform.

Financial Innovation

A total of 969 new financial and quasi-financial institutions have been established over the past year. Collectively, they have handled the filing of cross-border Rmb loans worth more Rmb5.688 billion, most of which were conducted in association with Hong Kong and Macau financial institutions. Hong Kong's Chong Hing Bank has also now set up a branch in the Nansha New Area.

Financial Leasing

A total of 103 new financial leasing companies – collectively with a registered capital of some Rmb45 billion – have moved into the New Area. The value of the new contracts subsequently secured amounted to around Rmb30 billion.

Guangzhou has also made considerable progress in the area of aircraft leasing. In total, three aeroplanes have been delivered as part of an initial cross-border aircraft leasing deal with the Guangdong FTZ.

Science and Technological Innovation

This year, local spending on science and technological research enjoyed a 68% year-on-year increase, with the New Area now home to 25% of all of the new R&D institutions in Guangzhou. The number of high-tech enterprises in the New Area has also increased dramatically, rising by 35.7% year-on-year. This resulted in the production of high-tech products worth Rmb136.4 billion, some 47.6% of the region's gross industrial output.

The Hong Kong University of Science and Technology (HKUST), in collaboration with University of Hong Kong and the Chinese University of Hong Kong, also established the Guangdong-Hong Kong-Macau (International) Youth Entrepreneur Hub. This now operates under the auspices of the HKUST Fok Ying Tung Research Institute.

From a macro point of view, the Nansha New Area registered increases across all of the relevant economic indicators in 2015. Its average economic growth during the 12th Five-Year Plan period (2011-2015) was also the highest in the city. A total of 9,919 new enterprises were established locally, exceeding the total number of enterprises in existence before the establishment of the FTZ. Collectively, the registered capital of these new enterprises was around Rmb83.58 billion.

There are now 783 Hong Kong- and Macau-funded enterprises in the New Area, representing a total investment of US$11.565 billion.

Table: Nansha New Area: Current Development
Table: Nansha New Area: Current Development

Christine Deng, Guangzhou Office

Content provided by Picture: HKTDC Research
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