Residents in Hong Kong and Macao can buy wealth management products sold by mainland banks operating in the Greater Bay Area. AFP
The Chinese mainland moved to further deepen its economic ties to Hong Kong, allowing two-way, cross-border purchases of wealth products.
As per detailed announced, a pilot programme will facilitate cross-border purchase of wealth management products (WMPs) by residents in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), the People’s Bank of China (PBoC), the country’s central bank, said on Monday.
Regulators on Monday announced the kick off of a long anticipated programme dubbed “Wealth Management Connect”, which will allow residents of Hong Kong and Macao special administrative regions and those living in nine cities on the mainland to buy financial products in each other’s markets.
This will help residents of the two offshore centres and those living in nine mainland cities to place accumulated cash across the border. Cross-boundary remittance under the programme will be handled in a “closed-loop” through the bundling of designated remittance and investment accounts, the PBoC said in a joint statement with the monetary authorities of Hong Kong and Macao.
Chinese mainland residents in the GBA will be allowed to open special investment accounts with the banks in Hong Kong and Macao to buy their qualified WMPs, while residents in Hong Kong and Macao can buy WMPs sold by mainland banks operating in the GBA, the PBoC said in an online statement.
It said cross-border capital flow under the programme will be capped, while individual investors will be granted a quota on their WMP investments.
Fund flows under the northbound and southbound connect will be subject to aggregate and individual investor quotas, said the PBoC. The date of a formal launch and other details will be separately announced.
Beijing has also pledged commitment to the city’s status as a finance hub. Mainland investors boosted share purchases over the past months through the so-called stock connect link while a number of high-profile Chinese firms listed shares in Hong Kong.
Chief Executive Carrie Lam Cheng Yuet-ngor has lobbied for more financial integration, telling mainland officials that the city should become a global hub for private wealth and a more prominent offshore Renminbi centre.
The city should be “promoting greater connectivity” between its financial markets and mainland China’s, she said in June.
In May, the nation’s financial regulators announced a wide-ranging plan to streamline cross-border transactions and investments between Hong Kong, Macao and southern Chinese cities. Policy makers seek to turn the GBA into a high-tech centre to rival California’s Silicon Valley.
CHINA DAILY/ASIA NEWS NETWORK
