Stronger mutual access for financial markets

Hong Kong and the other 10 cities in the Guangdong-Hong Kong-Macao Greater Bay Area are likely to strengthen mutual finance market access under the blueprint unveiled by the central government on Monday, which could contribute to the further opening-up of China's financial industry.

According to the document, financial connectivity among cities in the Bay Area will be stepped up progressively. Cross-boundary transactions in financial products, such as funds and insurance items, within the region will be promoted, and the types of investment products and channels will be expanded continuously. A mechanism for mutual access to capital and products is to be set up.

The blueprint also supports building an international commercial bank to serve the region's development. An account management system is being explored as well to facilitate cross-boundary usage of the yuan and capital account convertibility, and make it easier for cross-boundary settlement of trade and investments.

Shen Jianguang, chief economist at JD Digits, said these measures would enable Hong Kong companies to operate more freely in other Bay Area cities and offer plenty of opportunities for mainland companies to operate in Hong Kong.

The development plan further supports eligible Hong Kong and Macao banks and insurance institutions in setting up operations, especially in strategic development zones like Shenzhen's Qianhai, Guangzhou's Nansha and Hengqin in Zhuhai.

As a financial center known for offering various financial services, Hong Kong could spread its impact to the Chinese mainland under an upgraded Closer Economic Partnership Arrangement, said Shen.

He noted that the current policy framework is a long-term fundamental plan as it takes a long view up to 2035. The major task in the short term is to reduce barriers among cities and strengthen connectivity from all sectors among them, with the first step to be taken in infrastructure construction.

There's also room for China to further open up the financial sector through the Bay Area, Shen believed, saying it's quite important for the nation, as it's experiencing slowed economic growth.

He expects the national economy to grow at 6.2 percent this year, with a low-to-high trend likely - 6 percent in the first half and 6.4 percent in the second half.

Shen explained that many favorable policies have recently been launched by the central government, and the effects may take several months to be felt.