Tax-Free Industrial Zone Proposed Between Hong Kong And Shenzen

by Mary Swire, Tax-News.com, Hong Kong

30 September 2003

In a meeting with President Hu Jintao in Beijing last weekend, Hong Kong business magnate Li Ka-shing put forward a proposal to create a tax free industrial zone in the border region between Hong Kong and the mainland city of Shenzen.

Li made his suggestion during a meeting between Chinese state leaders and a delegation of Hong Kong business persons, and suggested that the proposal would help reduce unemployment levels in the SAR, which reached 8.6% in August. Although the project would be administered by the Hong Kong authorities, it would also be open to firms from China, and Li has suggested that firms operating in the zone should employ a certain ratio of workers from China and Hong Kong.

There has been some speculation that Li raised the subject with President Hu due to a lack of interest in the idea from the Hong Kong government. However, Li has said that the Chinese leadership needed to be consulted due to the disputed ownership of the reclaimed land in question.

"The support of the central government is required because the land-use right is not clear. Does it belong to Hong Kong or Shenzhen, or both? That is why I talked [about the proposal] up here [in Beijing]," Mr Li explained, according to the South China Morning Post.

Recommended