Editorial | Forum delivers for Hong Kong with stronger superconnector role
- From wealth management to bonds and banking services, mainland China has shown further support for city as a financial hub
The 17th Asian Financial Forum in Hong Kong this week has showcased the city’s rapidly expanding role as a financial hub and superconnector with China’s economy. It has also served as a platform for the announcement by mainland and Hong Kong authorities of policy changes that increase support for the city in wealth management, bonds and banking services.
The biggest revelation by the People’s Bank of China, the Hong Kong Monetary Authority and the Securities and Futures Commission is a boost for the Wealth Management Connect scheme, a two-way cross-border investment channel rolled out a couple of years ago. It has had limited success, mainly because of restrictions and a small investment quota of 1 million yuan (HK$1.1 million).
The PBOC has raised the quota to 3 million yuan and dispensed with a lot of red tape. The direction of the two-way investment flow so far has probably been tilted north to south, since there are more
Hong Kong wealth management products and options to choose from. So the enhancements are expected to result in an even greater share of money coming to the city. They are a welcome response to complaints by banks and insurers that the previous rules were inadequate and too restrictive.
The support package for Hong Kong also includes expansion of the Bond Connect investment channel between the city and mainland markets from February 26, and relaxed cross-border payment rules within the Greater Bay Area to make it easier for Hong Kong and Macau residents to buy homes there. The latter measure will do no harm to the mainland’s ailing property market if people are prepared to invest in it at present.