Turning yellow dust into gold

Once across Macao's Lotus Bridge on the reclaimed land of Cotai, the splendid facade of Macao's casinos and the quiet repose of its green spaces, the landscape suddenly becomes transformed into a sea of yellow dust, craggy rocks and sandy bays. It would have required a great leap of imagination for the traveler of just a few years ago, to picture how this piece of virgin land, Hengqin Island, would transform into an international advanced economic zone.

Hengqin, originally a quiet island city sits in the southern part of Zhuhai, today is a prospering Special Economic Zone.

Its population, is only about 3,000 on a piece of land of 106.46 square kilometers, three times the size of neighboring Macao.

Sandtable of Hengqin in the future as an international economic zone. (Photo provided to China Daily)

After being designated in the nation's 12th Five year plan, as one of three new Special Economic Zones: Hengqin in Zhuhai city, Nansha in Guangzhou city and Qianhai in Shenzhen city. The three locales have stepped into the national spot light over night.

"We are facing interminable difficulties through the construction process ... the geological conditions are not good and quite complicated ... we are building up everything out of the blue on this barren island," said Niu Jing, director of the Administrative Committee of Hengqin New Area, Zhuhai city.

After over two years' construction , the island still looks like a huge construction site with heavy equipment everywhere. Some 13.5 billion yuan has been invested in infrastructure for the project, which includes major roads, large scale underground structures, pipelines, tunnels and so on.

The once "barren island" has 23 major projects under way, with a total investment of over 120 billion yuan. Six of those projects involve Hong Kong and Macao investors, whose investments amount to 64 billion yuan.

One of the six major joint projects is the new campus of Macau University. Work is nearing completion. Students will be attending classes in Hengqin this year. The 1 square-kilometer campus, immersed in greenery is 20 times larger than the old campus in Macao. The new facility will be administered by the Macao government. Macao Law will apply on the campus. The Macao government acquired the property rent-free from the Hengqin bureau.

With more residential houses under construction, and more people expecting to move to the island, the population is expected to climb to 120,000 in the near future.

Hengqin, has set its pillar industries as financial services, leisure and tourism, Chinese medicine and high-tech innovation etc. The plan is focused on high-end service industries.

"The soul of Hengqin is innovation of systems — to make the best use of all the pioneering policies. The advantages we gain through cooperation with Hong Kong and Macao and will promote regional economic integration in the Delta area," said Niu.

Niu predicts Hengqin will become the gateway for cooperation and economic integration between Hong Kong and the western delta area.

The "innovative soul" of Hengqin has already demonstrated its vitality.

Over the past week, on August 30, Hengqin was granted the "super privilege" of being approved for foreign investment registration. The Hengqin bureau has been empowered to approve foreign investment projects ranging from $30 million to $100 million, without applying to the Guangdong Province Administration of Commerce.

A foreign company with an investment of 500 million yuan can be registered in Hengqin in just a half day at the bureau. There is no longer any need to travel to Guangzhou to register, said Niu.

"Hengqin is the first and only economic zone that has this power. This is really special and really important," said Niu. "With this policy, it's much easier and more convenient to do business in Hengqin. It's upgrading our business environment to a more competitive international level."

All companies that meet certain standards benefit for a low 10 percent corporate income tax rate. And, all Hong Kong and Macao residents who work in Hengqin are taxed under the SAR tax system.

Innovative planning is also in evidence at the border. Hengqin has two check points, one "frontier line" between Hengqin and Macao, and a "back line" between Hengqin economic zone and Zhuhai, or the rest of the mainland.

Hong Kong and Macao residents pass readily through the "frontier line". Hengqin is a bonded area. Mainland residents make their customs declarations going through the "back line".

In the future, vehicles with only Macao licence plates will be able to come and go through Hengqin freely. There will also be subways that directly link Macao with Guangzhou downtown areas.

"We've seen the magnificent advantage of cooperating with Hong Kong. We could be the gateway for Hong Kong to expand its modern service industries into the western delta area," said Niu.

"We have the best policy, the most flexible system and the widest developing space, and we are confident of providing more business opportunities for Hong Kong companies," said Niu.

Close cross border ties spur boom in Hengqin

Cooperation between the Hengqin special economic zone and its neighbor Macao is surely wider and closer than others. One of the co-founders of the Chinese Medicine park in Hengqin was the first investors and among the top cooperative projects.

With an total investment of 600 million yuan and an area of 50 square kilometers, the Guangdong-Macao Chinese Medicine Science and Technology Industrial Park actually a large scale complex of the Chinese medicine industry. Research and development, health treatment, medicine information service. There is also a rising tide of Chinese health resort.

"So far the Chinese medicine park has attracted investors, Chinese medicines companies from overseas. We had also recruited experts in Chinese medicine from over the world," said Echo Chan, the chairperson of the Guangdong-Macao Chinese Medicine Science and Technology Industrial Park Development Co Ltd.

"Chinese medicine was a treasure of our country, however, because there is no national standard for quality testing and authentication, many firms couldn't meet their expectation and ruined its reputation among foreigners," said Niu Jin, director of the Administrative Committee of Hengqin New Area.

"With professionals and talents in Chinese medicine gathered in the park, we're hoping to set up a national standard for quality testing and control for Chinese medicine. The object is for this national treasure to become standardized, with its credentials acknowledge by the international society," said Niu.

The park was co-founded by the Macao government (51 percent share) and the Hengqin bureau (49 percent share).

The Chinese Medicine Park was one of the projects included in the Macao-Guangdong Cooperation Industry Park.

The pillar industry in Macao is the gaming industry, however, One objective is to transfer some of Macao's highly profitable entertainment and gaming industry to Hengqin.

Officials optimistic on the bridge

After the suspension of work on the Hong Kong portion of the Hong Kong-Zhuhai-Macao Bridge, resulting from a legal challenge to the environmental impact study of the project, Yu Lie, deputy director of the Hong Kong-Zhuhai-Macao Bridge Authority, said he was saddened by the interruption, but remains confident that the bridge will be finished on schedule in 2016.

"I feel sorry for the effect of the legal challenge. The construction schedule for the Hong Kong part was certainly affected, which will put more pressure on Hong Kong to catch up and complete the project in time," said Yu.

"As long as Hong Kong can catch up with its schedule, the whole project won't be delayed. In that case, the impact of the environment case would be limited," said Yu.

A landmark case brought by an elderly Hong Kong citizen appealed to the Court regarding the validity of the environmental impact study on the bridge, which forced the Hong Kong government to suspend construction of 78 related projects in January 2010. Later the Hong Kong government won the case on appeal, construction resumed in September 2010.

By then, the suspension had added another HK$6.5 billion to the budget.

"Hong Kong government has been hurrying the constructing schedule since. Will the case affect the project? ... I think Hong Kong is a legal society and we believed in legal justice," responded Adolph Leung, principal economist of Economic Analysis and Business Facilitation Unit of the Hong Kong government.

The Hong Kong-Zhuhai-Macao Bridge will be the longest sea span in the world with a 35 kilometer span. It will also be the most difficult to build since it requires a 6 kilometer undersea tunnel. Starting from Zhuhai and directly to Lantau Island of Hong Kong, the bridge will reduce travelling time between the two cities from 4.5 hours to around 30 minutes.

"For the first time three cities joined in building such a giant infrastructure project, which is key to connecting the west coast of the delta with its east coastal line in Hong Kong," said Wang Wanping, chief economist of Zhuhai Development and Reform Bureau.

"The bridge will significantly promote regional economic integrity and rooster Hong Kong's position as financing and shipping center," said Wang.