China steps up support for Hong Kong’s role as financial hub for wealth products, bonds and green finance

Banks based in Hong Kong and Macau will be allowed a broader business scope on the mainland, including the issuance of bank cards, said the NFRA minister Li Yunze

Residents in the nine Guangdong cities in the Greater Bay Area will be able to invest up to 3 million yuan each in Hong Kong’s wealth management products, triple the previous limit

3-MIN READ3-MIN

Hong Kong’s Financial Secretary Paul Chan Mo-po delivers his welcome remarks at the 17th Asian Financial Forum on January 24, 2024. Photo: May Tse

Published: 3:30pm, 24 Jan 2024Updated: 10:02am, 25 Jan 2024

Beijing’s financial authorities have stepped up their support for Hong Kong as China’s global financial hub, after the nation’s bank regulator promised to open the doors for more wealth management products, bonds and green financing instruments to be issued and traded in the city.

The People’s Bank of China unveiled six policies, including the expansion of a transborder investment channel called Bond Connect between Hong Kong and the mainland’s financial markets, starting on February 26.

It also relaxed the rules for cross-border payment within the Greater Bay Area to make it easier for residents of Hong Kong and Macau to buy homes in southern China, providing a crucial crutch for the nation’s ailing property market. Other measure include an expansion of the e-CNY digital currency pilot in Hong Kong and sharing of cross border credit information among banks, according to Eddie Yue Wai-man, CEO of Hong Kong Kong Monetary Authority.

Residents in the nine Guangdong provincial cities that make up the Greater Bay Area will also be able to invest up to 3 million yuan (US$420,000) each in Hong Kong’s wealth management products, triple the previous limit under the Wealth Management Connect scheme.

The measures are aimed at “enhancing the connection between Hong Kong and the mainland markets,” said Hong Kong’s Financial Secretary Paul Chan Mo-po during a press conference at the Asian Financial Forum (AFF). “The measures will strengthen Hong Kong’s position as a connector between China and the world, and the city as an international financial centre.”

Julia Leung Fung-yee, CEO of the Securities and Futures Commission, said the expanded Wealth Management Connect will allow investors to invest in Greater China stock funds and will allow securities firms to sell the products, instead of banks only.