Spanning about 106 square kilometers, Hengqin island is nestled in the southern part of Zhuhai, Guangdong province, and is separated from Macao by a river. The unique location makes it play an irreplaceable role in connecting and interacting with Macao.

On Sept 17, 2021, the Guangdong-Macao In-Depth Cooperation Zone in Hengqin was officially established. From a fishing village to a highland for opening-up, the cooperation zone has made strides in integrated development with Macao and boosting its economic diversification.

During the first half of this year, Hengqin's GDP expanded 6.1 percent year-on-year to 24.99 billion yuan ($3.49 billion). By June, there were over 58,000 companies operating in the zone, including 6,411 from Macao.

Following its development plan, the zone is fostering "four new industries" to boost Macao's moderate economic diversification. These include scientific research and high-end manufacturing, traditional Chinese medicine, culture, tourism and conventions, as well as modern finance.

To attract promising companies and drive industrial growth, Hengqin has introduced a slew of favorable policies and set up an industrial investment fund worth 10 billion yuan.

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For the integrated circuit industry, for example, eligible enterprises are offered financial support; their researchers and executives can receive tax relief and bonuses of up to 150,000 yuan.

Hengqin is where policies, talents and capital gather together, said Li Hung-chun, a Taiwan resident who set up the company Lingyange Semiconductor in the zone's Guangdong-Macao Integrated Circuit Design Industrial Park in 2020.

"It allows us to access international experts and cutting-edge technologies as well as outbound markets," Li said.

In the first three years, the enterprise saw its revenue increase from 30 million yuan to 150 million yuan. This year it is estimated to reach 300 million yuan.

As of June, there were 268 national-level high-tech companies and nearly 800 Macao-funded tech companies in the zone, along with 30 sci-tech innovation platforms at national and provincial levels.

Lei Chi Wai, director of the zone's economic development bureau, said that Hengqin has formed an integrated industrial development model which utilizes Macao's platforms, international resources and Hengqin's spaces while sharing achievements with Macao.

That has attracted major projects to the zone and helped them progress, Lei said.

Two-line customs management

Starting from March 1, a two-line customs management system has come on stream, promoting the efficient fl ow of people, goods, capital and information between the two areas. The new customs measure designates the boundary between Hengqin and Macao as the "first line", and the one between Heng qin and other parts of the Chinese mainland as the "second line".

Under the pioneering customs management system, goods that meet certain conditions will be exempt from tariffs when entering the cooperation zone through the "first line", while goods entering the zone through the "second line" can apply for export tax refunds.

"These directly benefit high-tech companies and foreign trade companies like us, reducing our operating and purchasing costs," said Zhu Zhenyu, general manager of Guangyao (Zhuhai Hengqin) Pharmaceuticals Import and Export.

Many suppliers in the big health industry are considering setting up a branch or office in Hengqin due to the tax incentives, he said, adding that he expected to see more industrial resources and partners in the zone.

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To strengthen cooperation with Macao in traditional Chinese medicine, Hengqin has established a mechanism which allows medical products to be registered and sold in Macao, while being produced in Hengqin. So far, a total of six products have received approval to be produced in this way. All of them meet the requirement that they realize at least 30 percent of the total processing added value in Henqgin.

The first one — the far-reaching medicated oil of Macau Original brand was made by Guangdong-Macao Pharmaceutical in 2023.

Based on the mechanism, Macao's pharmaceutical companies can have more space to achieve large-scale production and enhance their competitiveness, said Sun Dapeng, deputy general manager of the company.

Both Sun's and Zhu's companies are located in the Traditional Chinese Medicine Science and Technology Industrial Park of Cooperation between Guangdong and Macao.

As the first project under the Framework Agreement on Cooperation Between Guangdong and Macao, the industrial park was home to 231 registered enterprises by July, including 79 from Macao as well as several research platforms including the Chinese Medicine Guangdong Laboratory, or the Hengqin Laboratory.

Close partnership

In the culture, tourism and convention sector, Hengqin and Macao have established a close partnership and released a batch of policies to encourage events to be held in Macao and Hengqin concurrently.

Additionally, starting from May 6, residents from the Chinese mainland can make multiple trips between Hengqin and Macao via Hengqin Port within seven days. Before that, they were allowed to visit Macao every two months. Visitors must sign up for Hengqin-Macao group tours through travel agencies approved by the zone before their departure, according to the zone's regulations on Hengqin-Macao tour groups, and the groups are required to enter and exit Macao as a whole.

The policy is conducive to sharing tourism resources between Hengqin and Macao, bringing tourists a wider range of tour products and better experiences, said industry experts.

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Lei said for the next step, the zone will launch cross-border tourism routes in collaboration with Macao and create Hengqin-Macao tourism brands to boost the integrated development of the two areas' tourism.

By the end of June, the zone was home to more than 17,000 enterprises involved in the "four new industries", with their combined added value reaching 11.78 billion yuan during the first half of this year.

New home

In November 2023, Macau New Neighbourhood, the first livelihood project built for Macao residents on the Chinese mainland, was officially opened for sale in Hengqin, drawing in flocks of buyers.

Covering an area of 190,000 square meters, the community consists of 27 buildings and some 4,200 apartments, with green spaces accounting for 35 percent.

Among the buyers was Wong Chi Choi, executive director of Authenmole (Macao) Traditional Chinese Medicine Technology. The company set up a subsidiary in Hengqin in 2020.

Wong chose a three-room apartment with a balcony. "Compared with our house in Macao, the apartment is much more spacious, but its price is about one-third of a similar property in Macao," he said.

Because of work, Wong and his wife have to travel between Hengqin and Macao frequently. "The new residence also cut down our commute time, bringing more convenience," he said.

In addition to price and position, the community's facilities and services are appealing to Wong, who just became a father in July.

So far, it has built a family center, a seniors' service center and a health station running on Macao's medical system, as well as the Hengqin School Affiliated to Hou Kong Middle School, which mainly recruits students from Macao and Hong Kong.

The project will gradually match up with Macao in education, healthcare and other livelihood services to give residents a living and working environment similar to Macao and improve their sense of happiness and achievement, local officials said.

The school is the first on the Chinese mainland to join Macao's free education system, indicating its students can receive the same treatment as those in Macao, according to the livelihood affairs bureau of the cooperation zone.

Nie Xinping, deputy director of the zone's executive committee, said that Hengqin will continue to improve public services in the Macau New Neighbourhood and implement supportive policies on innovation and entrepreneurship to attract more Macao residents, especially young people, to the zone.

Contact the writer at zhanglinwan@chinadaily.com.cn