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The Mainland Proposed Financial Support Measures for the Development of the Greater Bay Area 

August, 2020 -

Four mainland financial and monetary authorities, including the People’s Bank of China, proposed measures from five perspectives to support construction of the Greater Bay Area (“GBA”) in the Opinions on Financial Support for the Construction of the Guangdong-Hong Kong-Macao Greater Bay Area (the “Opinions”). The measures mentioned in the Opinions are summarised below with a focus on the banking sector.

(i)

 Opening up of the financial sector: Expansion of the scale of opening up of the financial sector and increasing financial cooperation within the GBA. Detailed measures include:
  • Facilitating the development of Hong Kong and Macau banks in the GBA. Foreign banks are encouraged to expand their banking business and establish branches and subsidiaries in the GBA while foreign investments in trust companies and other financial institutions in the area are also encouraged.
  • Supporting orderly establishment of foreign-controlled securities companies, fund management companies and futures companies. Expansion of the permitted business scope of joint ventures securities firm. Mainland supervisory authorities will initiate pilot programmes as regards cross-border business of securities and futures institutions.

(ii)

 Promoting cross-border trade and facilitating investment and financing within the GBA: Mainland Chinese banks encouraged to provide cross-border loans to institutions and projects in Hong Kong and Macau. Subsidiaries of Hong Kong and Macau banks encouraged to offer lending services for construction of GBA infrastructure.

(iii)

 Facilitate interconnectedness between financial markets: Gradual relaxation of restrictions on Hong Kong and Macau clearing banks’ participation in the inter-bank lending market in Mainland China. The development of an offshore RMB market will be promoted by strengthening Hong Kong as a global offshore RMB business hub and the circulation and exchange of RMB in the GBA will be facilitated. Green finance to be promoted using foreign exchange pilot programmes for carbon emissions trading and allowing qualified foreign institutions and individuals to participate in carbon emissions trading in foreign currencies or RMB.

(iv)

Financial Innovation: Facilitation of cooperation between entities in the GBA on financial technology. Innovative financial technology such as blockchain, big data and artificial intelligence will be promoted in relation to marketing and sales activities, risk management and financial supervision. Hong Kong citizens will also be encouraged to use mobile electronic payment applications to make payments in RMB.

(v)

Mitigating cross-border financial risk: Financial regulators in the GBA will establish a coordination and communication mechanism for resolving cross-border financial development and supervisory issues, as well as a regulatory ‘sandbox’ for innovative Fintech.

Please see here for the Opinions in the complete Chinese version.

 



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