"The release of the Opinions shows that the pace of reform and opening up in China has not slowed down due to the impact of the epidemic, highlighting China's clear attitude and determination to further deepen reform and opening up." Pan, deputy governor of the People's Bank of China and director of the State Administration of Foreign Exchange, pointed out at the press conference that the Opinions will effectively enhance the ability to serve the real economy, promote the coordinated development of regional economy, inject new kinetic energy into economic growth, and provide solid financial support for building a first-class Bay Area and a world-class urban agglomeration with vitality and international competitiveness.
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What impact does the programmatic document bring?
Generally speaking, the Opinions is a further innovation and breakthrough based on a series of previous policies. The Industrial Research Report pointed out that some measures in the Opinions have been implemented in previous policies such as Notice on Further Promoting the Facilitation of Cross-border Trade and Investment (Huifa [2019] No.28) and Notice on Foreign Exchange Management Supporting the Development of Shenzhen Experimental Zone (Yuehuifa [2020] 15). Including trade and foreign exchange receipts and payments facilitation, capital account income payment facilitation, simplified foreign debt cancellation registration, simplified domestic capital payment procedures under capital, expanded cross-border asset transfer business, and supported non-investment enterprises to carry out equity investment pilot projects (promoted from Shanghai Free Trade Zone to the whole country).
He Fei, a senior researcher at the Financial Research Center of Bank of Communications, also said that the Opinions further refined the relevant financial contents of the Outline of Guangdong-Hong Kong-Macao Greater Bay Area Development Plan, and added new contents that need financial support in the construction of Guangdong, Hong Kong and Macao under the new situation, which is a model of policy integration and innovation and is of great significance.
He said that the promulgation of the Opinions has three important meanings:
First, it shows the determination of the national financial management department to unswervingly support major regional development.
Second, improving the level of cross-regional financial services is the key guarantee for further promoting major regional development strategies.
Third, it shows the country's confidence in unswervingly promoting financial opening up and achieving greater results.
The basis of the Opinions is to enhance Guangdong-Hong Kong-Macao Greater Bay Area's supporting and leading role in the country's economic development and opening up by increasing financial support, especially by opening up to Hong Kong and Macao, and to help create a new benchmark and new model of high-quality opening up.
In addition, Guan Tao, the global chief economist of BOC Securities, wrote that Shenzhen, as one of the core cities in Guangdong-Hong Kong-Macao Greater Bay Area, has further promoted the pilot of financial openness and innovation, which has pointed out the direction and opened up space for Shenzhen to better seize the opportunity of Guangdong-Hong Kong-Macao Greater Bay Area's construction and promote financial support for Guangdong-Hong Kong-Macao Greater Bay Area's construction. At the same time, it has created favorable conditions for Shenzhen to promote the construction of Socialism with Chinese characteristics Experimental Demonstration Zone at a higher starting point and level, and enriched the new practice of "one country, two systems" development.
In February this year, "Opinions on Further Accelerating the Construction of Shanghai International Financial Center and Financial Support for the Integrated Development of the Yangtze River Delta" has been put into practice. After a lapse of three months, the national financial management department once again issued the opinion of financial support for Guangdong-Hong Kong-Macao Greater Bay Area's construction. So far, the two key regions have clear and powerful policy frameworks and detailed rules, which point out the direction for the next regional development.
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Key points: wealth management, cross-border use of RMB,
Banking, securities and insurance are open to the outside world. ...
As a programmatic document of Guangdong-Hong Kong-Macao Greater Bay Area's financial support, what are the highlights of the Opinions?
The Opinions focus on facilitating cross-border trade, investment and financing, simplifying foreign exchange management in cross-border receipts and payments of traditional trade, new trade formats and insurance business, and put forward a number of measures, which greatly improved the convenience of exchange and use of local and foreign currencies. In terms of capital account opening, we will promote the establishment of a cross-border financial management mechanism, carry out cross-border loans, cross-border asset transfer and cross-border fund pool business integrating local and foreign currencies, and support private equity investment funds to carry out cross-border investment pilots.
Among them, "exploring the establishment of a cross-border wealth management mechanism" specifically means "supporting Guangdong-Hong Kong-Macao Greater Bay Area mainland residents to purchase wealth management products sold by Hong Kong and Macao banks through Hong Kong and Macao banks, and Hong Kong and Macao residents to purchase wealth management products sold by mainland banks through Guangdong-Hong Kong-Macao Greater Bay Area mainland banks." Xingye Research pointed out that since 20 19, discussions on wealth management have started between the Hong Kong Monetary Authority and relevant mainland authorities. After the publication of the Opinions, the formulation of relevant rules is expected to be accelerated. After the introduction of management rules, attention should be paid to the arrangement of quota management and fund exchange.
He Fei said that measures such as improving foreign exchange management of new trade formats, promoting the reform of capital account facilitation, and establishing an account management system suitable for Guangdong-Hong Kong-Macao Greater Bay Area's development are highly innovative. In particular, the establishment of a bank account system integrating local and foreign currencies will have a far-reaching impact on the existing bank account structure.
The opening up of the financial industry is also worthy of attention. The Opinions put forward that the banking, securities and insurance industries should be further opened to the outside world, and Greater Bay Area should take the lead in implementing various financial opening measures, focusing on supporting financial institutions such as banks in Hong Kong and Macao, securities and futures companies and insurance companies to expand their development space.
In this regard, He Fei said that supporting overseas banks to set up branches and subsidiaries in Guangdong-Hong Kong-Macao Greater Bay Area and commercial banks to set up financial asset investment companies and wealth management companies in Guangdong-Hong Kong-Macao Greater Bay Area are important measures to jointly promote opening up and regional development.
In terms of financing, the opinions put forward that "Hong Kong and Macao private equity funds should be supported to participate in the financing of innovative enterprises in Guangdong-Hong Kong-Macao Greater Bay Area, and qualified innovative enterprises should be encouraged to go to Hong Kong and Macao for financing and listing" and "research and explore the establishment of Guangdong-Hong Kong-Macao Greater Bay Area International Commercial Bank in Guangdong Free Trade Zone". According to the report of Xingye Research, by integrating the financial advantages of Guangdong, Hong Kong and Macao and giving full play to the advantages of financial exchange platforms such as the Gold Fair, the establishment of an international commercial bank can not only support Greater Bay Area's infrastructure and technological innovation, but also spill over to other regions, and it is expected to become a comprehensive investment and financing institution similar to AIIB.
Guan Tao pointed out that an important aspect of the Opinions is that financial reform and opening up should be tried first, such as gradually expanding the scale and scope of cross-border use of RMB in Greater Bay Area, including promoting the convenient cross-border circulation and exchange of RMB in Greater Bay Area; Support the establishment of RMB overseas investment and loan funds; Support the three places to use RMB for pricing and settlement when conducting cross-border financing, cross-border guarantee, cross-border asset transfer and reinsurance business; Strengthen Hong Kong's position as a global offshore RMB business hub and support Hong Kong to develop more offshore RMB, commodities and other risk management tools.
Among the above contents, promoting the development of offshore RMB market has attracted much attention. In this regard, the Hong Kong Supervisory Authority recently issued "Developing RMB Asset Market to Enhance the Position of RMB Hub in Hong Kong", proposing to strive for the opening of bond southward connection and ETF connection, studying the establishment of RMB giant funds, launching futures, options and ETF products based on the RXY index of the Hong Kong Stock Exchange, allowing CMU to use bonds within the system as collateral, and designing clauses including hedging RMB exchange rate fluctuations in bond repurchase products.
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Many innovations have landed in Greater Bay Area.
In fact, in the process of formulating the Opinions, some open and innovative work has been steadily advanced and landed.
Pan pointed out at the meeting that in terms of people's livelihood finance, the People's Bank of China has recently formulated and launched a number of financial policies with strong social needs according to the opinions of all parties. Including: witnessing the pilot of remote opening of mainland bank settlement accounts by Hong Kong and Macao resident agents, and gradually expanding the scope and scale of use of institutions; Facilitate Hong Kong and Macao residents to use mobile electronic payment in the Mainland; Hong Kong version of UnionPay "China UnionPay Express", WeChat and Alipay (Hong Kong) e-wallets have all been put into production. In terms of investment and financing facilitation, Guangdong has initially tried a higher level of trade investment and financing facilitation and foreign exchange management of new trade formats. From 20 19, the People's Bank of China and the State Administration of Foreign Exchange took the lead in launching a pilot project in Guangdong Free Trade Zone to facilitate trade in goods and payment of local and foreign currency income in capital projects. At the same time, some major innovation policies are being promoted steadily and orderly, including exploring the establishment of a comprehensive bank account system in local and foreign currencies suitable for Greater Bay Area's development and the "cross-border financial management" mechanism, which are being further improved and will be introduced one after another when conditions are ripe.
More pioneers tried to "blossom and bear fruit" in Guangdong-Hong Kong-Macao Greater Bay Area. For example, the establishment, relocation and cancellation of insurance branches in Nansha and Hengqin areas of Guangdong Free Trade Zone were changed from examination and approval system to filing management; Another example is that the insurance agency business period required for Hong Kong and Macao insurance institutions to set up wholly-owned insurance agencies in the Mainland has been reduced from 10 to 3 years; Another example is the establishment of key institutions or platforms such as Guangdong-Hong Kong-Macao Greater Bay Area International Commercial Bank and Insurance Service Center, the first domestic corporate bond (referred to as "Lotus Bond") registered and issued by mainland enterprises in Macau for the first time, and so on. The construction of multi-level financial system in Greater Bay Area is progressing in an orderly and sustained manner.
There has also been a major breakthrough in cross-border RMB settlement business. In 20 19, RMB cross-border receipts and payments between nine cities in Greater Bay Area and Hong Kong and Macao reached 2.32 trillion yuan, up by 17.3% year-on-year, accounting for 45.4% of RMB cross-border receipts and payments, which was 5.8 percentage points higher than that of the whole country. RMB has continuously become the second largest settlement currency for cross-border receipts and payments in Guangdong, Hong Kong and Macao, and Hong Kong has become the largest offshore RMB business center in the world. The RMB clearing bank in Macao has initially established a RMB clearing network covering Portuguese-speaking countries. In terms of cross-border RMB financing business, by the end of 20 19, enterprises in nine cities in Greater Bay Area had invested RMB 83.984 billion through full-scale cross-border financing business. In terms of centralized operation of cross-border RMB funds, by the end of 20 19, nine cities in mainland Greater Bay Area had set up 580 cross-border two-way RMB fund pools, handling the receipt and payment of RMB 1.42 trillion yuan. In terms of facilitating Hong Kong and Macao equity investment funds to invest in mainland Greater Bay Area, all the 20 billion Macao financial reserve funds introduced by Guangdong-Macao Cooperation and Development Fund in the form of QFLP have been remitted, which has effectively promoted the construction of infrastructure and key projects in Guangdong.