Global Research on Financial Hubs ⑤|How Guangdong-Hong Kong-Macao Greater Bay Area can integrate financial resources

2018-May-14       Source: Newsgd.com

Financial resources have been ever more closely integrated worldwide in both new and established financial centers. Therefore, it is a must for the Guangdong-Hong Kong-Macao Greater Bay Area to accele

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Financial resources have been ever more closely integrated worldwide in both new and established financial centers. Therefore, it is a must for the Guangdong-Hong Kong-Macao Greater Bay Area to accelerate its opening-up process and develop an open financial center connected to the international market.

 

Organized by Xie Sijia, Liu Jiangtao, Xie Meiqin, Luo Yanjun, Zhang Ying, Huang Qianwei

Reported by Peng Lin, Huang Qianwei, Guo Jiaxuan, Tang Liuwen, Tang Zitian, Zhang Jun, Long Jinguang, Hu Nan

Edited by Olivia Ouyang, Simon Haywood

Chinese Version please click:

国际金融中心深调研⑤|粤港澳大湾区如何开放连接,打通金融血脉?


Hong Kong: a “launchpad” for Chinese enterprises to go global

Stuart Gulliver, former group chief executive of HSBC, stated that Hong Kong as an international financial center is a “launchpad” for Chinese enterprises to go global.

“Hong Kong is an important partner for the clusters of innovation enterprises in Guangzhou and Shenzhen,” said Mr. Gulliver.

Indeed, Hong Kong, like London, has the key ingredients of an international financial center—the abundance of international financial institutions.

According to Shi Wei, Chief Risk Officer of Bank of China (UK), around 60% of banking assets in London are foreign capital, and many US-funded and Japan-funded banks in London are active in commercial and investment banking.

Likewise, Hong Kong is home to about 70 of the top 100 international banks. By the end of 2016, there were already 195 authorized banking institutions and the representative offices of 57 foreign-funded banks.

In fact, quite a few Chinese enterprises have entered the international market with the help of this “launchpad”. In 2015, HSBC’s Guangzhou Branch and HSBC Hong Kong helped Guangdong Rising Assets Management Co., Ltd. and Guangzhou Metro to issue bonds (totaling 1.1 billion USD) to the international capital market in Hong Kong.

Qiao Lei, CFO of the Bank of China (New York), thinks that Hong Kong can further improve its competence as a global financial center with the regional advantages of the Guangdong-Hong Kong-Macao Greater Bay Area, and in return Hong Kong can help develop the Area into another global financial center.

Catherine McGuinness, chairman of the Policy and Resources Committee, City of London Corporation, also expressed her wish to cooperate with the Guangdong-Hong Kong-Macao Greater Bay Area in the financial sector.

“The Area has made considerable progress and we are interested in the further internationalization of the RMB, green financing, and the development of financial technology,” said Ms. McGuinness.


The Greater Bay Area: a potential multi-city financial center

To be a multi-city financial center may be the trend for the future development in the Area. In this case, the time-honored cooperative model— “having the stores out front and factories behind”— in the manufacturing industry may be replicated in the financial industry.

In the manufacturing industry, “the stores out front” refer to Hong Kong and Macao, “the factories behind” refer to the Pearl River Delta. Products made in the Delta are sold worldwide through Hong Kong and Macao.

Similarly, in the financial sector, “the stores in front” now refer to foreign-funded or Hong Kong-funded financial institutions in Hong Kong, and “the factories behind” still referring m to the Pearl River Delta. However, “the stores in front” are now providing international financial products and services for “the factories behind”.

The model meets the expectations of the financial sector as it introduces financial services from Hong Kong into Mainland China, benefiting the economy on the Mainland and expanding the market for financial institutions in Hong Kong.

Qiao Lei, CFO of the Bank of China (New York), hailed the plan of developing the Area as “a forward-looking idea”.

“With Hong Kong’s edge in the financial industry, we can give scope to the potential of the Greater Bay Area and develop the Area into an international financial center.” commented Mr. Qiao.

Wang Baolian, assistant professor from the Gabelli School of Business in Fordham University, pointed out that Guangzhou and Shenzhen could duplicate the advantages and learn from Hong Kong’s experience in the integration process of the financial market.

Besides, Professor Wang also comments that policy support is in urgent need. “The biggest problem lies in how to integrate the flows of capital, human resources and logistics between Hong Kong, Macao and Mainland, China,” says Professor Wang, “it goes way beyond the Greater Bay Area alone when it comes to combining the advantages of the three regions and realizing a comprehensive opening-up to the outside world.”

Editor: Nan

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