Chinese regulators extend financial support to bring Hong Kong, Macau closer
China’s financial regulators revealed an extensive plan to ease investments and cross-border transactions between Hong Kong, Macau, and other southern Chinese cities as part of the government’s plan to transform the coastal region into a high-tech city to compete with California’s Silicon Valley.
China unveils sweeping financial support plan to tie Hong Kong, Macau closer https://t.co/cOTUAbXJhc
— Bloomberg Economics (@economics) May 15, 2020
On Thursday, the People’s Bank of China, along with the nation’s banking, securities, and foreign exchange regulators, disclosed a number of measures to facilitate the so-called Greater Bay Area, including permitting the citizens of Hong Kong and Macau to purchase wealth management products and services provided by mainland lenders in the region and vice versa.
The Chinese policymakers have plans of turning the area into a global innovation hub, enhance inter-city infrastructure connectivity, and reinforce Hong Kong’s position as an international center of finance, shipping, and trade as well as the center for offshore yuan business.
According to the blueprint last year, the four key Bay Area cities, Hong Kong, Macau, Shenzhen, and Guangzhou are driving the region’s economic development. HSBC Holdings Plc has approximated that the region — with about 67 million residents — would enclose a trillion-dollar economy and block Japan as one of the world’s largest exporter.
The plan also encompasses the following points:
- Supporting the offshore yuan business in Hong Kong and Macau and improving Hong Kong’s part as a worldwide hub for the offshore yuan
- Establishing a futures exchange in Guangzhou
- Increasing the yuan-denominated funds to facilitate the Belt & Road initiative
- Assessing a cross-border cash pool business
- Supporting cross-border bank lending
- Facilitating the expansion of payment service providers in Hong Kong and Macau