Guangdong is studying the idea of establishing a "special cooperative region" with Hong Kong. The concept of a Guangdong-Hong Kong-Macau Special Cooperative Region is now a hot topic in promoting the integration of the three places.

A special study group comprising a number of departments and organisations, including the Guangdong Foreign Trade and Economic Cooperation Department, Guangdong Development Research Centre, Guangdong Academy of Social Sciences and Zhongshan University, is conducting an extensive study on the integration of Guangdong, Hong Kong and Macau. The study report is scheduled for completion before May.

It is understood that the study will focus on various aspects of the Guangdong-Hong Kong-Macau Special Cooperative Region, including its content, feasibility, advantages and disadvantages to the three parties, impact on the state and neighbouring areas, possible problems and formulation of counteracting strategies, and implementation procedures.

Chen Guanghan, director of Zhongshan University's Center for Hong Kong, Macau and Pearl River Delta Studies and a member of the study group, points out that under the CEPA framework, the most viable way to strengthen Guangdong-Hong Kong-Macau cooperation is to make special arrangements targeted at practical issues and to launch pilot cooperation projects on a small scale.

A bold suggestion is introducing free trading of stocks, securities and futures within the special cooperative region. Song Hai, vice governor of Guangdong province, disclosed that Guangdong will attempt to establish a special financial zone with Hong Kong and Macau.

Informed sources have pointed out that the main functions of the Guangdong-Hong Kong-Macau Special Cooperative Region will be similar to those of free trade zones. The biggest difference is, for free trade zones, cooperation is among independent customs territories; but this is not the case with the special cooperative region as Guangdong is not an independent customs territory.

According to Liang Guiquan, director of the Guangdong Academy of Social Sciences, as the comparative advantages of the Pearl River Delta continue to weaken, the previous mode of cooperation between Guangdong and Hong Kong in form of "shop in front, factory at rear" no longer works and is fast deteriorating.

Liang points out that the establishment of a Guangdong-Hong Kong-Macau free trade zone to further remove obstacles to cooperation and promote the in-depth integration of these three places is a practical need. This is in line with the idea of forming a Guangdong-Hong Kong-Macau Special Cooperative Region proposed by the Guangdong authority.

The study on Deepening Guangdong-Hong Kong-Macau Cooperation initiated by Wang Yang, secretary of the Guangdong Provincial Committee, has now been placed at the top of the 12 important research topics of Guangdong. Li Miaojuan, director of the Guangdong Development and Reform Commission, also indicates that in the next stage, construction of cross-boundary infrastructure projects among Guangdong, Hong Kong and Macau will be speeded up. Since Wang Yang took up his office in Guangdong, the progress of cooperation among the three places has been further accelerated.