Qianhai Cooperation Zone’s judicial progress benefits Hong Kong

As the development of the Guangdong-Hong Kong-Macao Greater Bay Area proceeds apace, an infrastructure boom is underway in Shenzhen. In Qianhai, which has been described as “Shenzhen’s Manhattan”, the Qianhai Cooperation Zone (QCZ) is scheduled for completion by 2025. Its development plan envisages closer ties with Hong Kong, particularly in the areas of business and technology, and the groundwork for this has already been done.

Since 2010, Qianhai has been developing as a base for enhanced cooperation between Hong Kong and Shenzhen, with preferential measures, including a special enterprise income tax rate of 15 percent, being introduced to benefit Hong Kong and other businesses operating there. By 2020, over 10,000 Hong Kong enterprises had registered in Qianhai, while over 100,000 of its permanent residents had conducted commercial activities there or taken up employment. On Sept 6, 2021, the Qianhai Plan was unveiled by the central government, and this will expand the zone by seven times.

The plan envisages institutional innovation, opening-up, and the development of modern service industries over the next decade, and Hong Kong’s involvement is seen as pivotal. The expanded QCZ will be 1.5 times larger than Hong Kong Island, and it is expected to draw heavily on Hong Kong’s professional services. This includes its legal capabilities, given that any successful economic model must, as the planners recognize, be underpinned by impeccable legal arrangements.

It was undoubtedly with this in mind that, in 2021, the Ministry of Justice approved, on a pilot basis, the GBA examination for Hong Kong’s common law-trained practitioners, and this enables them to acquire a civil law practicing certificate for the GBA. Once qualified, GBA lawyers are able to provide specialist services throughout the GBA, thereby enriching places like the QCZ, and promoting the greater integration of legal services. On July 5, 2022, the first GBA practicing certificate was issued to a Hong Kong solicitor, and many other local lawyers will undoubtedly be acquiring them in future.

For its part, Qianhai has been enhancing its judicial system, and the progress made deserves to be better known. Recent improvements have not only boosted the credibility of its commercial arrangements, but also inspired confidence in everybody doing business in the QCZ. It is, for example, now possible for Hong Kong, Macao, Taiwan and foreign enterprises that are registered in Qianhai to agree, when entering into civil or commercial contracts, on the choice of applicable law, with Hong Kong law being an option that will attract many, and this is an area in which the city’s GBA lawyers will have an increasingly significant role to play.

In terms of legal infrastructure, the Shenzhen Court of International Arbitration has, with an eye on the future, taken the initiative. Once it created the Shenzhen Qianhai Cooperation Zone People’s Court (“Qianhai Court”), the new body adopted international commercial rules, and this is now enabling Hong Kong, Macao, Taiwan and foreign legal professionals to provide arbitration services.

In a white paper the Qianhai Court issued on Sept 17, 2020, it disclosed that it had appointed 32 Hong Kong people and 74 foreign mediators to handle overseas-related disputes. As of July 2020, Hong Kong residents had been involved, as people’s assessors, in the hearing of 423 cases, while the foreign mediators had resolved 660 disputes through mediation. Quite clearly, this type of outside involvement is calculated to inspire business confidence in Qianhai’s burgeoning opportunities.

Of the 9,463 commercial cases involving Hong Kong, Macao and foreign businesspeople that the court had handled over the previous five years, 80 percent were satisfactorily resolved. Of those, over 70 percent, or 6,692 cases, involved people from Hong Kong.

The paper also highlighted the Qianhai Court’s commitment to building a modern economic system that accords with global practices, and it prioritized the creation of a “rule-of-law business environment” in the free trade area. It also indicated how various international instruments, including the United Nations Convention on Contracts for the International Sale of Goods, as well as foreign laws, had been applied in the resolution of some of its cases.

Since its inception, the Qianhai Court has been commendably proactive. It has promoted cross-regional and cross-border legal research, exchanges and cooperation, and established the Qianhai Legal Intelligence Forum, which holds periodic meetings attended by overseas legal professionals and experts. It has also established partnerships with 47 arbitration and mediation institutes around the world, and, under its own auspices, it created the Court-Connected Mediation Center under the Belt and Road Initiative, which is connected to the International Commercial Court.

On May 28, 2016, when the Court-Connected Mediation Center was opened, the then-secretary for justice, Rimsky Yuen Kwok-keung, said it would enhance both the efficiency and quality of mediation services in Hong Kong and Shenzhen in handling cases involving Hong Kong parties. He also noted that it would help both places to acquire greater experience in the handling of cross-boundary commercial mediation, and so it has proved. It is responsible for mediation both before and during litigation, with one notable feature being the introduction of a neutral third-party evaluation mechanism for cases involving Hong Kong parties and the engagement of Hong Kong mediators in mediation matters. This is being achieved as a result of Hong Kong mediators making neutral third-party assessments of the possible outcome, according to the relevant Hong Kong laws, and then helping the parties to resolve their disputes through mediation.

Quite clearly, the Qianhai Court is a trailblazer, and it has publicized some of its more innovative initiatives with a view to assisting other Chinese courts. These have been wide-ranging, and include such things as creating an efficient dispute resolution center, forming a Hong Kong people’s assessor team, applying blockchain technology to obtain evidence in financial cases, and conducting online litigation. By sharing its experiences in these and other areas, and providing detailed explanations online, the Qianhai Court has become a powerful agent of change and an example to courts elsewhere in the country.

The commercial opportunities available throughout the GBA generally, and in Qianhai in particular, are clearly a godsend for Hong Kong’s businesses, institutions and professionals, and they must be seized. With the Qianhai Court operating as a modern, progressive and international judicial body, a secure legal environment is taking shape that mirrors that of Hong Kong. The closer involvement of Hong Kong’s legal professionals in the GBA’s development is also a big step forward, and this bodes well for the future.

Whatever the concerns of the past, there is now no need to fret over either greater connectivity between financial markets in Hong Kong and the Chinese mainland, or over the city’s further financial integration into the GBA, and these developments should benefit everybody in Hong Kong.

The author is a senior counsel and law professor, and was previously the director of public prosecutions of the Hong Kong SAR.

The views do not necessarily reflect those of China Daily.