In a 2020 article writing for social media account SZeverything, Zheng Lei, chief economist at the Hong Kong-based Sun Financial Group Limited and deputy director of the Hong Kong International New Economic Research Institute who wrote the book Tides Surging on Dapeng Bay-Shenzhen in Graduates’ Eyes (2020), emphasized that Shenzhen’s fundamental key to success is being “a small government in a big society,” where the government allows the market to play as the core driver of social development. Different from many other local governments that like to directly manage and even control the market, Shenzhen’s government, according to Zheng, allows every market participant to independently develop under government supervision, and the government is also supervised by society.
“The government serves as guardian of the market, responsible for guarding a fair and just market order, and if the market breaks down, the government makes necessary but limited interference to return it to high efficiency,” Zheng said. “This requires very high governance skills which are key for other local governments to learn and master,” he added.
His words conform to the bulletin of the third plenary session of the 18th Central Committee of the CPC published in 2013, which said the core of economic reform is to “deal well with the relationship between the market and the government.”
“To better play the government’s role is not to play more but to manage the affairs the market could not deal with on the premise of allowing the market to play the decisive role,” President Xi Jinping emphasized at the fifth plenum in 2015.
“Officials from many other cities may have been accustomed to call local enterprises ‘the enterprises we manage or charge,’ while Shenzhen’s officials call the enterprises ‘those we serve,’” Zheng said.
According to the Shenzhen government, Shenzhen uses World Bank standards to appraise the business environment and launched a series of policies that facilitate innovation and business approval. For example, the customs bureau has rolled out 29 measures to simplify the clearance process. From January to August, imports and exports in Shenzhen increased by 15.9 percent year-on-year. By the end of August, there were more than 3.7 million businesses in Shenzhen, a 7.2 percent growth year-on-year, with business density listed as first among Chinese cities. Despite the Covid-19 pandemic, the gross profit of industrial enterprises above designated size in Shenzhen grew by 10.6 percent in 2020 compared to 2019, much higher than the national average growth of 4.1 percent.
The central government giving a high degree of autonomy to Shenzhen’s authorization powers is one reason for the city’s free innovation. The authorization list which empowered more freedom in governance covers six fields, including business environment, technological innovation and public service, and required breakthrough revisions to prevailing laws, regulations and policies.
Shenzhen issued China’s first law on individual bankruptcy and tried the country’s first case of individual bankruptcy. The city also launched the first local regulations on data management, technological innovation and green finance. At a press conference on October 14, Liu Zhao, vice minister of China’s Ministry of Justice (MOJ) revealed the MOJ is promoting Shenzhen to expand local administrative adjudication and reform the local judicial working system concerning foreigners and foreign-invested enterprises. It also encourages Shenzhen’s judicial circle to exchange more with those in Hong Kong and Macao.
Wang Xi, deputy governor of Guangdong Province, told reporters at the same press conference that Guangdong’s government, based on the central government’s orders, has given Shenzhen more freedom to conduct reforms and set up a green channel to quickly approve related projects. The provincial government has already appraised the effect of each reform and promoted other cities to cooperate with Shenzhen to expand the influence.
At a sub-seminar of the 2020 China Reform forum held on December 28, 2020, in Shaoxing, Zhejiang Province, Sun Huaming, deputy director of the Shenzhen Municipal Committee’s Reform Office, said that the central government’s program to build Shenzhen into a pilot demonstration zone of comprehensive reforms indicates that the central government is trying to make the reform more systematic and hopes Shenzhen could play a demonstrative role in institutional construction.
NDRC spokesperson Meng Wei said at a press conference on August 17 that “a general implementation program plus authorization lists” is the central government’s new trial for reform modes which so far have had preliminary effects in other parts of the country.