Lin Juzheng gave a lecture to talk about the development of Shenzhen
Date: 2020-06-18

Strategic Thinking on Innovative Development and Mission of Pilot Demonstration Area Under an Unprecedented Change in Hundred Years

On June 12, 2020, at the invitation of the Department of Finance of Southern University of Science and Technology, Lin Juzheng, Deputy Inspector of the Shenzhen Local Financial Supervision Administration, Deputy Chairman of the Shenzhen Institute of Financial Stability Development and Secretary of the Party Branch, visited the Department of the Finace and gave a lecture " Strategic Thinking on Mission and Development of Pilot demonstration area under Hundred years of Unprecedented Change in Directorate" at the Faculty Activity Center. This meeting was chaired by Professor ShaunWang. Mr. Lin Juzheng introduced his thoughts on the development of Shenzhen in the following points.

1. Shenzhen's economic and financial environment

Mr. Lin Juzheng first talks about Shenzhen's economic and financial development environment. In 2019, Shenzhen's GDP totaled 2.69 trillion RMB, ranking among the top five in Asia, the top three in China, and enters the ranks of the world's first-tier cities. From the perspective of the world's top 500 companies, of the seven the world top 500 companies are eheadquartered in Shenzhen, six companies are cultivated in Shenzhen, which implies Shenzhen has strong economic vitality and development potential.

Mr. Lin Juzheng believes that Shenzhen is a city where technological innovation and financial innovation complement each other. From the perspective of the financial industry, Shenzhen is one of the three major financial centers in China. The value-added of the financial industry is in the lead of China, and the tax revenue of the financial industry ranks the first in the China. From the perspective of science and technology, Shenzhen is the "Silicon Valley" in China. There are more than 17,000 high-tech enterprises in Shenzhen. The city's R&D investment exceeds 100 billion, and PCT international patent applications are the first in the country for 16 consecutive years. Shenzhen is a technological innovation City.

Mr. Lin Juzheng believes that the "The Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area" issued in February 2019 proposes a goal "building a dynamic and internationally competitive first-class bay area and world-class city cluster." in which Shenzhen's development orientation is to "build a modern international city and become a capital of innovation and creativity with world influence."

2. The historical mandate of the strategy of the Greater Bay Area and the Pilot Demonstration Area

With the issuance of two important documents, the " The Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area " and "Opinions on the building of the pilot demonstration area of socialism with Chinese characteristics", Mr. Lin Juzheng believes that Shenzhen's "dual zone" strategy requires breakthroughs and innovations in the “pioneer movement”, greater achievements of reform and opening-up in the “demonstration”. Construction of the pilot demonstration area must also be based on self-confidence, theoretical self-confidence, institutional self-confidence and cultural self-confidence.

3. The New Era Characteristics of the Development of the Greater Bay Area and the Pilot Demonstration Area

Mr. Lin Juzheng proposes to pay attention to the background difference between the new era of socialism and the early stage of reform and opening-up. In the early days of reform and opening-up, China was mainly faced with two major backgrounds. First, there was lack of consensus in the implementation path of reform and opening-up. Second, the economic foundation was weak, and production equipment lagged behind Western countries. During that period, the basic line of the primary stage of socialism, the principle "focusing on economic development, adhering to the four basic principles, and adhering to reform and opening-up" was established. With the rapid development of the Chinese economy, the overall national strength has been significantly enhanced, but deep-seated economic development issues have become increasingly significant. Major social contradictions have undergone significant changes, and socialism with Chinese characteristics has entered a new era. Mr. Lin Juzheng talks about the difference in the development plan of the "dual zone" under the characteristics of the new era, which is mainly reflected in different development goals, priorities and missions.

4. Some constraints on the development of the Greater Bay Area and the Pilot Demonstration Area

Mr. Lin Juzheng says that there are both aspects of soft and hard constraints in the development of the Shenzhen.

At present, the financial reform and opening-up enter the deep water area. Shenzhen's financial department must be developed from a point to an area, from the expansion of scale in the past to the expansion of breadth and depth now, which all require higher voice and decision-making power. Therefore, Shenzhen needs to actively strive for having more voice from the central government or increase the decision-making power of the central government's Shenzhen-based institutions, and continuously promote the implementation of major financial projects in Shenzhen. In addition, how to breakthrough the constraints of land resources is also a key to Shenzhen's construction.

For the soft constraints existing in development, one is that Shenzhen’s relatively lack of financial policy represents a limitation the space for breakthroughs in the pilot zone. The other is the lack of full competition with overseas benchmark cities currently.

5. Innovation and Breakthrough under Strategic Opportunities of the Greater Bay Area and the Historic Mission of the Pilot Demonstration Zone

Given the strategic opportunities for the development of Shenzhen's, Shenzhen's future development requires some innovations and breakthroughs.

One is the breakthrough in top-level design. In order to improve the coordination efficiency between the pilot demonstration zone and the central ministries, it is necessary to establish a coordination agency in the central level, under the deep reorganization by the central government. The coordination agency of the Pilot Demonstration Zone can conduct top-level planning for the future of development of Shenzhen.

The second is breakthrough in resource. It is necessary to strive for the central and Guangdong government to agree on Shenzhen’s appropriate expansion and on the acceleration of production capacity on the newly added land. Shenzhen need to make full use of the existing land resources such as the Shenzhen-Shantou Cooperation Zone to carry out the spatial transfer of Shenzhen’s pillar industries, boosting Shenzhen’s economy and anticipation of the development of the Pilot Demonstration Zone.

The third is breakthrough in financial integration and collaborative. Breakthrough in the existing interest groups. In-depth docking with "what Hong Kong and Macao needs, what Shenzhen can do, what the Bay Area wants", and the realization of the interest pattern in promoting the construction of cooperation zones inclines to Hong Kong and Macao. Breakthrough in regulatory coordination. Establishing high-level regulatory coordination agencies to promote regional regulatory cooperation and breakthroughs in key areas, which is conducive to broadly absorb the development demands of various regions. Breakthrough in legal synergy. The legal differences between Guangdong, Hong Kong and Macau have caused difficulties in the development of cross-border financial businesses in those places. So it is necessary to adopt ways to strengthen the legal breakthrough. Breakthrough in common currency. It is necessary to draw on the experience of the European in issuing Euros and to explore the issuance of a unified currency in the Greater Bay Area, which can be locked to RMB.

The fourth is the breakthrough in financial internationalization. The key to Shenzhen’s breakthrough in financial internationalization lies in creating a financial foundation that matches the international advanced cities, creating an international financial market with RMB internationalization, constructing a financial format in which multinational financial institutions gather, and providing financial services. The ultimate goal of Shenzhen is to become a leading international city of financial center.


Q&A procedure


Q1: Thank you, Mr. Lin, As far as I know, The proportion of financial tax is very high in Shenzhen and it is said more than a million employees in the financial industry. You just talked about the synergy between the financial industry and the manufacturing industry. Will the development of the Shenzhen financial industry have an drop-out effect on the manufacturing industry?

A1: The data you said about more than a million financial practitioners is not true. Shenzhen does not currently have so many employees in the financial industry.

In response to the crowding-out phenomenon you just mentioned, financial sector does have a crowding-out effect on manufacturing industries if the financial industry is too big. However, technological innovation and financial development can complement each other in fact: without the support of the technology industry and its innovation, finance is difficult to grow bigger and stronger since the ultimate goal of the financial development is to serve the real economy. The Shenzhen Government has always been committed to the innovation of its administrative systems and mechanisms, and actively created good business environment to better promote the development of enterprises. Of course, market development has its own laws, while the government’s positive actions are also instructive. It should be recognized that the rise and fall of any industry is a long process.


Q2: Do you have any suggestions for the development of the SUSTech?

A2: SUSTech has achieved very good processes in just a few years, which shows that the leaders, teachers and classmates of SUSTech are all very good. I believe that there are higher skies beyond our skies and more talented people excellent than us. The SUSTech will be better and better.


Q3: Hello teacher Lin, I am a graduate student in the Department of Finance. You just said that we hope that Shenzhen can expand capacity. Why does capacity expansion bring Shenzhen greater development potential?

A3: Shenzhen's existing land resources have reached the limit and are unsustainable. We hope that Shenzhen can expand its capacity to meet its future development and planning. Only in this way can it bring more space and potential for development and build an excellent global benchmark city.


Q4: In recent years, the central government has issued a number of important regional plans, such as Shanghai, Shenzhen and Xiong'an New District. Are there competitive relationships between them? Which one will develop better in the short and long term?

A4: It is spring when flowers bloom together, and vitality can only come from a thousand horses. Shenzhen has a very good location advantage and innovative soul, which is rare in other cities. In addition, there is a Chinese proverb: "Crying children have milk to drink". The development of those cities you just mentioned is the same. I hope that classmates at SUSTech can develop better. I have great confidence in the young people here. I hope you can flourish and become a social pillar with thought, pattern and contribution.


Speaker’s bio: Lin Juzheng, Deputy Inspector of Shenzhen Local Financial Supervision and Administration Bureau, Deputy Chairman of the Shenzhen Institute of Financial Stability Development, Secretary of the Party Branch (Principal Person in Charge), Visiting Professor of the Chinese University of Hong Kong (Shenzhen), Phoenix Net Comprehensive Special Observer. Wuhan University, Master of International Finance, Fudan University, Ford class graduate student, Nankai University, World Economics in-service doctoral student. Author of Shenzhen Municipal Government's "Some Provisions on Further Supporting the Development of High-tech Industries", "Tenth Five-Year Plan for Shenzhen's Financial Development"; published more than 30 papers in "Economic Research", "Financial Research", etc. Fund Investment and Market. Hosted research on "Shenzhen's Strategic Study on Promoting the Status of a Global Financial Center", "Shenzhen's Research on the Feasibility and Path of Establishing a Futures Exchange", "Study on the Pilot Demonstration Zone's Financial Innovation and Development" and other major topics of the Shenzhen Municipal Committee and Municipal Government.


Lin Juzheng gave a lecture to talk about the development of Shenzhen

Lin Juzheng gave a lecture to talk about the development of Shenzhen

Lin Juzheng gave a lecture to talk about the development of Shenzhen