Qianhai plan boosts HK

September 7, 2021

Secretary for Justice Teresa Cheng

The Plan for Comprehensive Deepening Reform & Opening Up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Co-operation Zone was promulgated by the central government yesterday, under which Qianhai will be developed into a new platform for Guangdong-Hong Kong co-operation, aiming to establish a new system for a higher-level open economy and build a globally competitive business environment preliminarily. The total area of the Qianhai Shenzhen-Hong Kong Modern Service Industry Co-operation Zone is eight times of the existing one, increasing from 14.92 sq km to 120.56 sq km.


A higher level of opening up in legal matters and the establishment of an international legal services centre and an international commercial dispute resolution centre in the region have been clearly stated in the Qianhai plan. After the expansion of the zone, the number of registered Hong Kong-invested enterprises will definitely be higher than the present number of 11,500. In other words, more opportunities will be created for the legal and dispute resolution sector. I would like to express my heartfelt thanks on behalf of the sector to the central government for its support and care. The Department of Justice (DoJ) will join hands with the legal sector to seize the opportunities and utilise the expertise to integrate into the overall national development.


In respect of the legal and dispute resolution matters, five points can be collated from the measures set out in the Qianhai plan as below:


(1) Explore ways to improve the mechanism for wholly owned Hong Kong enterprises (WOKEs) to adopt Hong Kong law and choose for arbitration to be seated in Hong Kong


The regulations of the Qianhai Shenzhen-Hong Kong Modern Service Industry Co-operation Zone of the Shenzhen Special Economic Zone implemented last October and the Opinions of the Supreme People's Court on Providing Judicial Guarantee for the Building of Pilot Free Trade Zones announced some years ago demonstrated the feasibility for WOKEs to adopt Hong Kong law and choose for arbitration to be seated in Hong Kong. With the expansion of the Qianhai co-operation zone, the number of enterprises that are applicable to adopt such measures will no doubt increase. The DoJ will continue to explore ways of improving the mechanism with relevant Mainland authorities and strive to better implement such measures in Qianhai.


(2) Establish a new mechanism for civil and commercial judicial assistance and exchanges


The judicial assistance measure for mutual recognition of and assistance to corporate insolvency proceedings and debt restructuring implemented earlier illustrated the feasibility of cross-boundary insolvency co-operation. The DoJ and Shenzhen will jointly explore the enhancement of the implementation mechanism in this area, as well as different legal systems and cross-boundary legal regulatory interface to further facilitate the assistance and exchanges of all parties.


(3) Deepen the reform of the partnership association mechanism


In 2019, the Department of Justice of Guangdong Province removed the restriction of the minimum capital injection ratio of 30% by Hong Kong partner firms in the partnership associations set up between Mainland and Hong Kong law firms, encouraging and facilitating more Hong Kong law firms to establish partnership associations to provide a one-stop shop of cross-jurisdictional legal services in the Mainland. Coupled with the GBA Legal Professional Examination, more lawyers familiar with the laws of the two places will be available for the Qianhai co-operation zone for seizing the business opportunities together. This can play a leading role to demonstrate to the legal professions of the two places for exploring the ways to deepen the reform mechanism, with a view to providing high-level legal services to the business community.


(4) Support and encourage the establishment of representative offices


With the support of the governments of Shenzhen and Hong Kong, the eBRAM International Online Dispute Resolution Centre, South China International Arbitration Center (HK) and Des Voeux Chambers will serve as the first batch of Hong Kong institutions to join the Greater Bay Area International Arbitration Centre exchange and co-operation platform. The platform embodies the collaboration between the industries of both places and is committed to jointly build an international investment arbitration and mediation mechanism in the Qianhai co-operation zone.


(5) Jointly promote the international commercial dispute resolution business


Hong Kong has a pool of experienced professionals in legal and dispute resolution services, and is also the only common law jurisdiction within China. Shenzhen has been actively developing a one-stop dispute resolution platform for mediation, arbitration and litigation, and a huge market has been created by the policies on Qianhai and the Guangdong-Hong Kong-Macao Greater Bay Area. Hong Kong's legal and dispute resolution services sector shall make good use of the measures under the Qianhai plan, while following the principle of complementary and mutually beneficial as well as joint construction and shared benefits, to complement Qianhai's development, so as to jointly promote the international commercial dispute resolution business.


Following the successful rollout of the GBA Legal Professional Examination, more legal practitioners who are familiar with the legal matters of the two places will be available for the Qianhai co-operation zone and the bay area, enabling the effective implementation of above policies. As such, we believe that more enterprises will be attracted to invest in the bay area.


The DoJ and the Department of Law of the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region, with the support of the Hong Kong Law Society, will co-host a seminar on Hong Kong legal professionals' practice and other opportunities in the bay area this Thursday. It is our honour to have central government officials to explain to the Hong Kong sector, the policies beneficial to Hong Kong and the opportunities in the bay area. Different sectors of Hong Kong should, on the premise of "one country, two systems" and under the principle of pursuing mutual benefit and win-win co-operation, continue to integrate the needs of the country with the strengths of Hong Kong, and further enhance the city's advantages, in order to foster the long term development of Hong Kong, the bay area and our country, and more importantly, to strengthen Hong Kong people's sense of belonging to the nation and boost their national identity.


Secretary for Justice Teresa Cheng wrote this article and posted it on her blog on September 7.

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