深港通: it’s not a bus pass

Three days ago, Premier Li Keqiang announced that 2015 was the year in which the yuan could be freely traded within an experimental area in Shenzhen. This Two Meetings (两会) announcement followed his January trip to Shenzhen, when he stated that the Central Government (中央) required three things from Shenzhen:

1) to continue to cultivate the fields of experimentation (继续种好国家改革开放的试验田);

2) to lay the road of creative development (打造创新发展的道路);

3) to become a model of a city that can accommodate development (成为包容发展的示范城市).

This conversation has been going on for at least three years, and as many recognize loosening restrictions on yuan convertibility is the whole point (first) behind Qianhai and which was then expanded to include Shekou and Nanshan within the expanded Free Commercial Zone (自贸区).

Thoughts du jour: first, this is another instance of how Shen Kong continues to provide the Central Government with a space of constrained flexibility.

Two, it may be that who (or more precisely which ministries) will benefit from this designation of a “special financial zone” have been decided. After all there is generally a drag time between the announcement of policy and the designation of bureaus and organizations that will actually implement the program.

Three, the accelerating financial integration of Shen Kong ironically shows up the increasing cultural differences between the two cities. Back in the day, for example, Shen Kong was presented as a cultural entity, which was connected by family relations. This metaphor explained why Shenzhen developed so rapidly. However, it’s been a while since the idea of cultural intimacy (despite the bamboo curtain) has been used to explain Shenzhen’s economic prowess. Instead, Shen Kong is increasingly deployed as an institutional fact that suggests not that Mainland cities are becoming more and more like Hong Kong (an idea that some Hong Kong based political activists once hoped for), but rather that the Central Government is well poised to manage and profit not only from the plethora of zones and exceptions, and exceptions to the exception that constitute Shen Kong specifically, but also from the dense integration of proliferating differences.

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