The free trade zone (FTZ) to be established in Guangdong Province is expected to facilitate financial innovation in the south China province, among other things, according to Yuan Zhimin, chairman of Kingfa Technology and a deputy to the 12th National People's Congress (NPC).

Yuan Zhimin, chairman of Kingfa Technology and a deputy to the 12th National People's Congress (NPC).[Photo / China.org.cn by He Shan]

The Guangdong FTZ will relax the customs control of goods, capital and personnel, essential elements for allowing business to prosper, Yuan said on Wednesday, March 4, before the opening of the third plenary session of the 12th NPC.

Yuan said the Guangdong FTZ was bound to be a highlight among all four of the FTZs in China, if not the best.

"The cost of capital will be lowered remarkably and offer tangible benefits to companies in the FTZ," Yuan said.

Financing from Hong Kong or the United States is less costly than domestic sources. Therefore, the free flow of capital in the future FTZ in Guangdong could make it easier for enterprises to apply for foreign currency?loan, as long as?risk control should be in place for foreign exchanges.

"Once the cost of financing is brought down, enterprises in Guangdong will benefit more," said Yuan in showing how external competition will promote local business to develop.

He added that the Guangdong FTZ would not be an upgraded version of the current CEPA (Closer Economic Partnership Arrangement) between Hong Kong and the Chinese mainland, because the latter mainly focused on goods trading, but the FTZ will cover the free flow of goods, capital and people.

The Guangdong FTZ will cover Guangzhou's Nansha New District, Shenzhen's Qianhai New District, and Zhuhai's Hengqin New District, in which Hengqin is already hailed as "the special zone in the special zone," for its proximity with Macao.