Qianhai, a special economic zone in northwestern Shenzhen, may be home to a “mini Hong Kong” featuring a special shopping mall with Hong Kong brands,  reports The Standard.

The Qianhai Management Authority revealed they are currently negotiating with Hong Kong merchants as they showed off the proposed area to Hong Kong and mainland media.

The report states that the Qianhai Management Authority plans to have the shopping mall developed and operational by the end of this year. However, the same report quotes Qianhai authority spokesman Wang Jinxia pouring a bit of cold water on the plan.

“The concept of setting up a shopping center in Qianhai to provide another choice for mainlanders is purely exploratory at this stage.”

The Qianhai Management Authority said the shopping center will be able to ease pressure on Hong Kong from the flood of visitors under the individual travel scheme. However, data shows that mainland visitors to Hong Kong dropped during the Labor Day long weekend, the first such drop since 2003. From May 1 to 3, there were only 388,070 visitors to Hong Kong, a drop of 1.7%.

And yet, others have been suggesting that mainland visitors who want to shop for Hong Kong goods be able to do so without having downtown Hong Kong involved in the process. The Heung Yee Kuk, a rural Hong Kong group, has recommended the establishment of a shopping center in Sha Tau Kok to divert mainland shoppers from the cool parts of town that Hong Kongers frequent.

This all sounds like a good idea that should have been implemented years ago, but one factor still remains unresolved. Wang stated that the Qianhai Management Authority has still has not yet decided whether the sales of Hong Kong products in the new “mini Hong Kong” will be tax-free.

For that, we may have to wait until the end of the year when the mall is finally completed or exploratory plans have been confirmed.

Photos: Hexun

The Shenzhen International Court of Arbitration opened in the 15-square-kilometer special zone on Sunday (Sept. 22), Southern Metropolis Daily reports. Its role will be to settle international legal disputes.

What Qianhai is expected to look like when it’s up-and-running, courtesy of Google Images.

Over one third of its council members and arbitrators are lawyers from Hong Kong or overseas, who can serve as arbitration agents in Qianhai, providing legal services for Chinese and foreign clients. Of the 11 council members, four are from Hong Kong or overseas.

There are 525 arbitrators from 29 different countries and regions, 34.3% of which are from outside of mainland China. Policy makers hope that this will strengthen confidence in its independence, neutrality and impartiality.

The Hong Kong Airport Express train

The Shenzhen Metro found itself in a firestorm last week after it was announced it would include VIP cars on trains operating on the new Metr Line 11, which will connect Qianhai with Bao’an Airport.

The Nanfang reported on Saturday:

While not common, first-class public transport trains do exist.  The most notable is next door in Hong Kong, where the East Rail Line connecting Lo Wu with Hung Hom features first class compartments.  Like Shenzhen’s plans, the first class car is roughly double the cost of other train compartments.

No word on what features the first class compartments in Shenzhen will have to justify the added cost.  However, it appears it will, at the very least, guarantee the ticket-holder a seat.  That’s better than in Hong Kong, where first class passengers have to stand if all seats are full.

Shenzhen’s plans were roundly criticized online, with a survey conducted by Sina showing 65% of respondents think setting up VIP compartments is inappropriate.

Shenzhen Metro has since responded with a kinda, sorta, not-really clarification: the compartments won’t be VIP compartments, just “special” ones. From the China Daily:

Chen Qi, deputy manager of the operating company of the Shenzhen Metro, said that that the company is not planning to set up VIP compartments but what they call “special compartments”.

“Line 11 is from downtown to the airport, like an airport express, so it won’t be very crowded,” he said.

“Trains for that line will have eight compartments, instead of six, so we plan to make two compartments special, on which we won’t sell standing tickets. This is to meet the demands of high-end customers,” he said.

This is pretty much exactly what was reported previously, so I’m not sure where the “clarification” comes in.  It is, however, interesting to note that Chen mentioned Hong Kong as a comparable.  Hong Kong indeed does have a special link to the airport, but it doesn’t have special compartments.

Nonetheless, we expect weary and jet-lagged travelers with heavy bags to pony up the extra fen for a seat on the new line 11 when it opens in 2016, no matter what the compartments are called.

An artists rendering of the new Qianhai Economic Zone

The 15-square kilometre Qianhai area in Shenzhen was supposed to be an experiment just as important as Shenzhen’s original experiment as China’s lone foray into the world of capitalism. This time, the experiment was to be political: Qianhai is an economic zone ithat was set to have its own tax policies, legal system, and anti-corruption body like Hong Kong’s ICAC.

Perhaps we should’ve known that, as exciting as this would be for the PRD (and China as a whole), it was just too much of a leap for China’s Communist Party. So while plans for Qianhai to be developed as an economic zone will continue, it will no longer be such a daring political experiment.

The South China Morning Post quoted the Southern Metropolis News as saying the U-turn had been made because “Qianhai is still at the beginning stage of attracting investment and construction. Its management shouldn’t take too many responsibilities besides economic development,” according to Zhou Rongsheng, the deputy director of the Shenzhen People’s Congress’ legal committee.

Also from the SCMP (behind a paywall):

Mainland media reported that people wre disappointed that the regulation no longer included many experimental measures aimed at blazing a trail for democratisation and fighting widespread corruption. The proposal for a Hong Kong-style graft buster and ombudsman was changed to a joint supervisory team involving the Communist Party’s disciplinary watchdog, prosecutors, police and auditors.

Qianhai, along with Nansha in Guangzhou and Hengqin in Zhuhai, was written into China’s 12th five-year plan for 2011-15 as a testing ground of strategic importance. Before the U-turn, it was set to have its own laws, regulations and tax regime by the end of the year.

I was in Qianhai a few weeks ago, and it remains a dusty outpost with a few new highrise apartments. It’s a long way from becoming, as was the original plan, “the Manhattan of the Pearl River Delta”. Instead of being on the cutting edge of political and economic experimentation in China, Qianhai will likely be destined to be “just another” economic zone, like all of the others that dot the country.

Qianhai will no doubt be successful as an economic zone, but it could have been so much more.