What’s new: China’s central bank will increase financial support for construction of the Hengqin and Qianhai cooperation zones as part of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) plan, a central bank official said.
The area including Hengqin and Qianhai will test free trade accounts, cross-border transfer of credit assets, foreign debt facilitation, cross-border capital pools and cross-border investment policies for private equity funds, said Pan Gongsheng, deputy head of the People's Bank of China (PBOC) and director of the State Administration of Foreign Exchange, Thursday at a news conference.
The restructuring and opening-up plan for the Qianhai cooperation zone specifically includes an expansion of financial sector liberalization, including pilot projects in connectivity with Hong Kong's financial market, cross-border use of the yuan and facilitation of foreign exchange management, said Li Jiachao, director of the Security Bureau of the Hong Kong Special Administrative Region Government.
In the next step, the central bank will lead Hong Kong and Macao financial regulators in formulating documents on financial support for the overhaul and opening-up of the two cooperation zones, Pan said.
Meanwhile, the PBOC will rely on Qianhai to strengthen Shenzhen-Hong Kong financial cooperation with a focus on the free cross-border flow of capital, a higher level of capital account opening-up, and promoting the openness and connectivity of financial services between Shenzhen and Hong Kong, Pan said.
The background: Qianhai is the western-most bay area in Shenzhen. The Qianhai cooperation zone was established in 2015. The State Council approved a plan Sept. 6 to expand the zone eightfold, making it twice the size of New York City’s Manhattan district as part of a plan to further integrate Guangdong province with Hong Kong.
Beijing also announced a new cooperation zone on the island of Hengqin, 60 kilometers southwest of Qianhai across the Pearl River estuary, to foster new industries to help make the economy of neighboring Macao less dependent on gambling.
The proposals are part of the GBA strategy, an ambitious plan announced in 2017 to transform the Pearl River Delta into a world-class city cluster to rival famous bay areas centered on Tokyo, New York and San Francisco. A detailed roadmap was released in February 2019 by the State Council and the party’s central committee covering nine cities in Guangdong province along with Hong Kong and Macao.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)
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