China has established another state-level development area in Guangzhou, capital of South China's Guangdong Province, in the hopes of further enhancing cooperation with Hong Kong and Macao.

The establishment of the Nansha New Area was officially announced by the Information Office of China's State Council on Tuesday. The New Area is situated in the south of Guangzhou City, the geometrical center of the Pearl River Delta, one of the most densely urbanized regions in China.

Zhu Xiaodan, governor of Guangdong Province, said, "Thanks to its location, the Nansha New Area will serve the whole Pearl River Delta, linking Guangdong Province, Hong Kong and Macao. Our goal is to make it a service-oriented economic hub with world class high quality of life. This is also a national strategic experiment. "

As the country's sixth State-level New Area after Shanghai Pudong, Tianjin Binghai and three others, the Nansha New Area in Guangzhou is the first such in South China. It is expected to get national support from a series of preferential policies and innovation reforms.

Fan Hengshan, director of Department of Regional Economy, NDRC, said, "We will give the Nansha New Area full-round favorable support in terms of finance, tax reduction, land and ocean administration, as well as talent mobility with Hong Kong and Macao."

Reporter: "Establishing the Nansha New Area is an important step of China's national strategic project to liberalize service trade within Guangdong Province, Hong Kong and Macau in 2015. Regulations on the New Area are currently being drawn up."

New State-level zone to boost ties with Hong Kong, Macao

The central government has unveiled a development plan for Nansha New Area, a State-level pilot zone in Guangdong province, to foster closer business ties with Hong Kong and Macao.

As the country's sixth State-level zone, Guangzhou's Nansha district will enjoy a slew of preferential policies on tax, land management, financial innovation and industrial development.

Fan Hengshan, director general of the Department of Regional Economy under the National Development and Reform Commission, said it would take about a decade to build Nansha into a high-quality living area and an example of modern urbanization with fully fledged public services and facilities.

The region will be granted the right to pilot mechanisms to drive growth. For example, the new financial agencies built in Nansha will be encouraged to explore businesses such as futures, credit insurance and financial leasing.

It will facilitate custom checks and relax controls on the length of residence of qualified foreigners, and allow qualified medical and construction service institutions and personnel to do business in the area.

Located in the southern tip of Guangzhou, Nansha covers an area of 803 square kilometers, with a land area of 570 sq km, and water area of 233 sq km. It has an obvious geographical advantage as it is only 38 nautical miles from Hong Kong and 41 nautical miles from Macao.

The city's green coverage has reached 41 percent, while it has per-capita green park space of 38 square meters.

In October 2011, Nansha won a gold medal at the United Nations' 15th Annual International Awards for Liveable Communities.

But the award did not come easy. In 2006, China Petrochemical Corporation and Kuwait National Oil Company planned to jointly invest in a petrochemical project in Nansha, which was approved by the NDRC.

The project was expected to bring an annual after-tax profit of 3.59 billion yuan ($550 million) after becoming operational. But the project was finally relocated due to environmental concerns.

Liu Yong, a researcher at the Development Research Center of the State Council, said the toughest choice facing places such as Nansha is whether to go for growth or safeguard the environment.

Nansha will focus on developing the manufacturing and modern service sectors, including shipping logistics, high-tech innovation and leisure tourism, automobiles and shipbuilding.

By 2025, the service sector is targeted to account for 65 percent of the area's GDP. The service industry accounted for 43.1 percent of China's total GDP in 2011.

Nansha New Area will also pilot economic reforms and explore the economic structural transformation of the Pearl River Delta area.

Zhu Xiaodan, governor of Guangdong province, said closer ties with Hong Kong and Macao will be fostered.

Cooperation with Hong Kong and Macao will gradually move from processing trade to the service sector, especially producer services and high-end services, said Zhu.