Macau’s yuan remittance limit raised to same level as Hong Kong as Beijing starts to shift financial focus
- China increased Macau’s daily yuan remittance quota for residents of the casino hub to 80,000 yuan (US$11,400) from 50,000 yuan (US$7,100)
- The policy was announced on Wednesday to mark the 20th anniversary of Macau’s return to Chinese rule as President Xi Jinping visited the city for a three-day trip
China has increased the daily limit of yuan remittance from Macau to the same level as Hong Kong, a move that suggests Beijing is keen to spread the financial risks away from the troubled city.
The policy, announced by the People's Bank of China on Wednesday to mark the 20th anniversary of Macau’s return to Chinese rule, will raise the daily limit on yuan remittance to 80,000 yuan (US$11,400) from 50,000 yuan (US$7,100).
“The measure is more symbolic in nature rather than being of practical use,” said Ding Wenjie, an economist at CMB International. “Macau is aiming to differentiate itself from Hong Kong in the region.”
In comparison, Hong Kong’s yuan stockpile stood at 636.4 billion yuan (US$91 billion) in the same month, according to the Hong Kong Monetary Authority.
Macau recorded 1.4 billion yuan (US$200 million) of cross-border yuan trade settlement in October, compared with Hong Kong’s 429.4 billion yuan (US$61 billion).
The measure is more symbolic in nature rather than being of practical use. Macau is aiming to differentiate itself from Hong Kong in the region
“Both Macau and Hong Kong aim to develop in the region. But this would also depend on which place investors prefer,” said Nathan Chow, senior economist at DBS Bank.
The announcement came as Chinese President Xi Jinping embarked on a three-day visit to the casino hub, saying the city’s government had been “fully and accurately” implementing the “one country, two systems” principle which allows both Hong Kong and Macau to retain their own capitalist economic and political systems.
Macau has already started its development in financial leasing, wealth management and yuan clearing services. It also agreed to the creation of a fund headquarters jointly set up by China and Portugal to drive forward the cooperation between large mainland e-business enterprises and non-banking payment organisations.
Meanwhile, China issued 2 billion yuan (US$286 million) of bonds in July, in the first so-called lotus bond or offshore yuan-denominated issuance in the city.
Macau’s legal system stems from its colonial Portuguese past and largely follows the continental model which is significantly different from the common law system followed in Hong Kong.
