Although Shenzhen is awaiting central government approval, rules for the centres are due to be announced this month and the municipal government is ready to accept applications from multinationals.

Ye Minhui, director of the foreign economic and trade bureau of Shenzhen, who revealed this, said the aim was to create a pilot city in opening the service trade sector to foreign companies as part of China's World Trade Organization pledges.

If the experiment in the southern special economic zone is successful, the scheme will be expanded to other mainland regions. Shenzhen will also open a platform for small and medium-sized foreign companies in the bond zone to do both foreign and internal trade.

However, Shenzhen's ambitious plans still need approval from the central government. China's Ministry of Foreign Trade and Economic Co-operation (MOFTEC) is reviewing the matter.

An official with the ministry's department of foreign investment said Wednesday that Shenzhen's proposal is feasible.

He said MOFTEC will work with the finance, taxation, customs and foreign exchange authorities to settle the issue.

A team will be sent to Shenzhen soon to conduct a feasibility study and seek opinions from local and foreign enterprises.

"It will be a process to balance interests from all sides," he said. "We have to see whether Shenzhen will still enjoy such advantage after China's WTO entry."

In spite of the temporary uncertainty of the central government policy, Shenzhen's steady lobbying, active promotion and a bold style in reforms and opening-up would help it win consensus from the top, insiders said.

Shenzhen seems to have got everything ready and it is likely the central government will accept the plan as it is, said an official with the State Administration of Industry and Commerce.

Yet even if the matter is approved, it will only be conducted on an experimental basis, because of a prudent attitude of the Chinese Government in issuing licenses to foreign-funded purchasing centres, Shenzhen's foreign trade chief Ye Minhui said.

So far, more than 20 foreign companies have submitted their applications.

Shenzhen is also working over new policies to enhance trade ties with neighbouring Hong Kong.

Hong Kong residents are already allowed to open stores as individuals and apply for booths in big department stores in the boundary region of Luohu.

Ye said the geographical restrictions will be lifted to allow them to open private stores in other parts of Shenzhen.

(China Daily June 6, 2002)