The Guangdong-Hong Kong-Macao Greater Bay Area Finance is making another step towards
"Cross-Border Financial Management" is coming!
Recently, the People's Bank of China, in conjunction with the Hong Kong Monetary Authority and the Macau Monetary Authority, issued an announcement that they will launch a pilot project for "cross-border wealth management" in the Guangdong-Hong Kong-Macao Greater Bay Area.
What is "cross-border financial management"? In short, it refers to the wealth management products sold by Guangdong, Hong Kong and Macau Greater Bay Area residents' cross-border investment in Guangdong, Hong Kong and Macau Greater Bay Area banks, and can be divided into "southbound" and "northbound" according to the identity of the purchaser.
As soon as the news was released, it was regarded as a great benefit in promoting the development of the Guangdong-Hong Kong-Macao Greater Bay Area, with multiple positive significance. Because the "cross-border financial management" in one fell swoop "three places". The mainland market has higher returns and returns for overseas investors, while the Hong Kong and Macau markets provide decentralized and diversified investment channels for mainland investors. Behind this, there is a hard-core logical support of mutual benefit and win-win.
Open the door to cross-border wealth management
According to the announcement, the "Southbound Connection" in the "Cross-Border Financial Connectivity" refers to the residents of the Guangdong-Hong Kong-Macao Greater Bay Area who have opened special investment accounts with banks in Hong Kong and Macau to purchase eligible investment products sold by banks in Hong Kong and Macau. "Beixiangtong" refers to residents of Hong Kong and Macau who have opened special investment accounts with banks in the Guangdong-Hong Kong-Macao Greater Bay Area to purchase eligible wealth management products sold by mainland banks.
According to reports, "Cross-Border Financial Connectivity" follows the relevant laws and regulations of the personal financial product management of the three places, while respecting international customary practices. "Northbound" and "Southbound" investor qualifications, investment methods, investment product scope, investor rights protection and dispute handling are handled by the People's Bank of China, Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, Foreign Exchange Bureau, Hong Kong Monetary Authority, Hong Kong Securities Regulatory Commission 3. The Macao Monetary Authority negotiated and determined.
"Northbound" and "Southbound" business funds are closed-loop remittance and closed management through account binding, and the scope of use is limited to the purchase of qualified investment products. Fund transfers are settled in RMB across borders, and capital exchanges are completed in the offshore market. The "Northbound" and "Southbound" cross-border capital flows are subject to a total amount and individual investor quota management, and the total amount is dynamically adjusted through macro-prudential factors.
According to Liu Ying, a researcher at the Chongyang Institute of Finance at Renmin University of China, “Cross-border financial management” has opened a convenient channel for the cross-border financial management of residents in the three places, while the rapid development of fintech has become “cross-border financial management” in the three places. The realization of the plug-in wings. In recent years, residents of the Guangdong-Hong Kong-Macao Greater Bay Area have been actively investing personally, and there has been a greater demand for cross-border purchases of bank wealth management products. "Focusing on micro-subjects and focusing on residents' investment are the highlights of this "cross-border wealth management" pilot." Li Jianjun, chief researcher of China Business Think Tank, believes that the "cross-border wealth management" business pilot will help meet the personal autonomy of residents of the Guangdong-Hong Kong-Macao Greater Bay Area The need for investment and flexible allocation of assets promotes the facilitation of personal cross-border investment by residents of the Greater Bay Area.
Another important measure for interconnection
"Cross-border financial management" is an important measure for the state to support the construction of the Guangdong-Hong Kong-Macao Greater Bay Area and promote financial cooperation between the mainland and Hong Kong and Macau. Interconnection is the key word for strengthening cooperation between Hong Kong, Macao and the mainland market in recent years.
In November 2014, the Shanghai-Hong Kong Stock Connect, which opened the mainland's Shanghai Stock Exchange and the Hong Kong Stock Exchange, was officially opened. In 2016, Shenzhen-Hong Kong Stock Connect realized the capital market interconnection between the Shenzhen Stock Exchange and the Hong Kong Stock Exchange. In 2017, the Bond Connect strengthened the mainland Interconnected with Hong Kong's bond market.
The "Outline of the Guangdong-Hong Kong-Macao Greater Bay Area Development Plan" released on February 18, 2019 clearly expands the space for cross-border investment between Hong Kong and mainland residents and institutions, and steadily expands the channels for residents of the two places to invest in each other's financial products. The People's Bank of China, together with the Hong Kong Monetary Authority and the Macau Monetary Authority, have done a lot of research and demonstration on the pilot of cross-border two-way financial management in the Guangdong-Hong Kong-Macao Greater Bay Area, and initially formed a pilot plan for "cross-border financial management."
The Guangdong-Hong Kong-Macao Greater Bay Area is composed of two special administrative regions, Hong Kong and Macau, and nine Pearl River Delta cities in Guangdong. It is one of the regions with the highest degree of openness and strongest economic vitality in China. The timely launch of "Cross-Border Financial Connectivity" has not only expanded the investment business channels and investment markets of financial institutions in Guangdong, Hong Kong and Macao, but also strengthened the interconnection of financial markets in Guangdong, Hong Kong and Macao, thereby promoting the regional economic integration of Guangdong, Hong Kong and Macao. Process. Through the "golden bridge" of cross-border financial management, Hong Kong and Macao are more closely linked to the mainland economy.
Hong Pizheng, chief executive officer of Standard Chartered Greater China and North Asia and chief executive officer of the group’s retail banking and wealth management business, said that with the gradual introduction of relevant policies in the Greater Bay Area, the region’s financial markets will be further opened, which will effectively attract foreign capital and enhance regional competitiveness. It is expected that the Greater Bay Area will become one of the major growth drivers of the Chinese economy in the future.
Demonstrate the strength and level of openness
In the opinion of industry experts, choosing the current time to announce this decision not only shows the support of the financial regulatory agencies of the three places for the construction of the Guangdong-Hong Kong-Macao Greater Bay Area, but also a strong support for the status of Hong Kong as an international financial center.
Yu Weiwen, President of the Hong Kong Monetary Authority said that "Cross-Border Financial Management" will open up huge customer sources and business development space for the Hong Kong financial industry, promote the growth of the local wealth management business market, and drive the entire financial industry such as product sales, asset management, and product development. The development of the chain will also benefit related professional service areas. Further speaking, the financial management expands the hinterland of Hong Kong's wealth management industry, provides more incentives for international financial institutions to set up and invest more resources in Hong Kong, serves mainland investors, and further consolidates Hong Kong's international financial center and global offshore RMB business Hub status.
Liu Ying said that the introduction of the "Cross-Border Financial Connectivity" is more helpful to support Hong Kong's long-term development when some Western countries talk about Hong Kong. In fact, Hong Kong is backed by mainland China, and its status as an international financial center is by no means shaken by a Western country.
Furthermore, after the implementation of the "Cross-Border Financial Connectivity", it is expected to further promote the growth of offshore RMB business and the opening of capital accounts, and advance the process of RMB internationalization. The expanded opening of the capital account will provide more opportunities for investors from both sides, and is another powerful measure for the internationalization of the RMB.
In recent years, China is accelerating the opening up of the financial industry, and foreign financial institutions are accelerating into China. The near-water tower is the first month, and the opening of the "cross-border wealth management link" in the Guangdong-Hong Kong-Macao Greater Bay Area has opened the window for the opening of the wealth management product market. In fact, it has accelerated the opening up of wealth management products in the banking and investment industries. The opening of "Benefit Financial Management" has enhanced the intensity and level of China's financial industry opening to the outside world.