2024 AFF: China’s policies to boost bonds and wealth management will help Hong Kong’s companies and home buyers, delegates say

The policies will be a boon for central bank digital currencies such as Hong Kong’s e-HKD and the mainland’s e-CNY, as they get the go-ahead for simultaneous trials

Another new policy known as cross-boundary credit referencing will allow banks in Hong Kong and the mainland to share credit information of the companies

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A panel discussion on the renminbi’s global use during the second day of the Asian Financial Forum (AFF) on 25 January 2024, featuring (left to right): Moderator Au King-lu, executive director of the Financial Services Development Council, Ding Chen, CEO of CSOP Asset Management, Nicolas Macket, CEO of Luxembourg for Finance, Karen Ng, managing director, China opening and RMB internationalisation of Standard Chartered, and Edward Lau Fu-keung, chief financial officer of New World Development. Photo: Jonathan Wong

Published: 1:15pm, 25 Jan 2024Updated: 5:08pm, 25 Jan 2024

Hong Kong’s role as the trading hub for offshore yuan will get a leg up from the policies unveiled by the People’s Bank of China to enhance wealth management and the Bond Connect transborder investment channel, according to speakers at the Asian Financial Forum (AFF).

The new policies will also benefit Hong Kong’s developers as they relaxed cross-border payment rules between the 11 cities of the Greater Bay Area to make it easier for the residents of Hong Kong and Macau to buy homes in southern China, said New World Development’s Chief Financial Officer Edward Lau Fu-keung.

“It is very beneficial to companies and other stakeholders,” Lau said during a panel discussion on the second day of the AFF in Hong Kong. “It is particularly helpful for companies like New World, with a strong presence in the Greater Bay Area,” as it stimulates transactions, he said.

Edward Lau Fu-keung, chief financial officer of New World Development, spoke at a panel discussion on the yuan’s internationalisation during the Asian Financial Forum at the Convention and Exhibition Centre (HKCEC) in Wan Chai on 25 January 2024. Photo: Jonathan Wong

Another new policy known as cross-boundary credit referencing will allow banks in Hong Kong and the mainland to share credit information of the companies.

“This will facilitate companies to do cross border financing and allow Hong Kong companies to take the cheap funding,” Lau said.

Alson Ho, Head of Hong Kong Wealth Management of Standard Chartered spoke on a panel discussion during the Asian Financial Forum (AFF) at the Convention & Exhibition Centre (HKCEC) in Wan Chai on 25 January 2024. Photo: Jonathan Wong.

The policies will be a boon for central bank digital currencies such as Hong Kong’s e-HKD and the mainland’s e-CNY, as they get the go-ahead for simultaneous trials in the city.

The expansion of the Bond Connect allows foreign investors to use onshore bonds as collateral for yuan-denominated funding from the Hong Kong Monetary Authority. They will also get access to the onshore repo market. Both policies will be implemented on February 26.