How HSBC helps Hong Kong residents access new investment opportunities in the GBA
- The Greater Bay Area, comprising Hong Kong, Macau and nine cities in Guangdong province, to play important role in growth of nation’s economy
- Products and services under the Cross-boundary Wealth Management Connect scheme fulfil financial needs from GBA residents
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Southern China’s rapidly developing megalopolis, the Guangdong-Hong Kong-Macau Greater Bay Area (GBA), is tipped to play an increasingly important role in the future growth of the nation’s economy.
The city cluster stretching across 56,000 sq km of the Pearl River Delta – comprising Hong Kong, Macau and nine cities in Guangdong province, including Guangzhou and Shenzhen – has a combined population of about 86 million, comfortably dwarfing the 67 million of the United Kingdom.
Its current gross domestic product – the monetary value of its finished goods and services – of US$2.2 trillion is tipped to more than double to US$4.6 trillion by 2030, the World Economic Forum reported last year.
Businesses around the world are attracted to the region, with an HSBC survey published last year revealing that 76 per cent of international companies were planning expansion – some of it significant – in the GBA over the next three years.
The GBA is also an attractive proposition for ordinary investors after a batch of banks, including HSBC, and with government support, launched services last October under the Cross-boundary Wealth Management Connect (WMC) pilot scheme as a pathway for individuals to invest directly in wealth management products offered by participating financial institutions.
This key initiative established a more convenient flow of funds between the capital markets of Hong Kong, Macau and mainland China. It means Hongkongers and other GBA residents can now more easily digitally invest in wealth management products, including more than 100 that are provided under HSBC’s WMC services.
Huge demand in cross-boundary investment
Potential investors are keen to explore those sectors that are tipped to benefit most from GBA development, with interest in the technology sector, biotechnology and energy – three areas that have seen rapid development in recent years.
“Funds are the preferred choices as they provide investors with a gateway to capture the opportunities from certain sectors or geographical markets, which may not be available to them previously outside the scheme,” says Daniel Chan, HSBC’s head of GBA.
In addition to diversifying portfolios through cross-boundary investment, potential investors also view the GBA as an opportunity for building a retirement plan. A report published in February by the Hong Kong Monetary Authority, the city’s central banking institution, showed that 89 per cent of respondents were considering long-term investments in the GBA.
This survey of representatives of 36 insurers, pension fund providers and asset managers in Hong Kong, mainland China, Europe and North America also predicted that Hong Kong’s ageing population will lead to greater demand for long-term assets that can provide post-retirement income over the next 30 years, with 45 per cent of demand expected to come from retirees.
“Like other cross-boundary financial initiatives, investors will need some time and support to better understand the opportunities in Asia and the global market,” Chan says.
“We are confident the demand will continue to grow when people are getting more familiar with the scheme and a larger variety of products are available.”
Meanwhile, improvements to transportation networks are increasing mobility between GBA cities, offering more opportunities as to where individuals choose to work, invest or live.
A survey by HSBC and international management consultancy Oliver Wyman suggested that about 40 per cent of respondents in Hong Kong intended to work, study or retire in GBA cities in mainland China within 12 months of the border reopening, while 72 per cent had longer-term plans to relocate once borders opened.
Important to find right support
Cross-boundary investment may be challenging for those Hong Kong residents who are unfamiliar with mainland markets and banks. Issues such as costs, responsiveness, lack of local market knowledge and expected levels of customer service could all be potential barriers.
However, HSBC, as the largest international bank and leading wealth manager in the GBA, is able to use its expertise in the region to serve as a bridge for investment between Hong Kong and mainland China.
Establishing a convenient experience for day-to-day cross-border banking is essential. HSBC is digitising at scale its wealth capabilities to help investors with their cross-boundary banking needs, by providing convenient online banking solutions that allow customers to do their banking easily – including a seamless cross-border funds transfer service.
Easy and convenient way to start
The WMC is an easy and convenient way to begin cross-boundary investments in the GBA, HSBC says.
The WMC pilot scheme is a two-way investment mechanism for retail investors in the GBA that permits eligible banks to facilitate cross-boundary investment through wealth management products. The Northbound Scheme offers a straightforward path for investors in Hong Kong to invest in eligible investment products.
The Northbound Scheme enables investors with paired remittance and investment bank accounts within the GBA to gain access to low- to medium-risk wealth management products distributed by its partner bank in mainland China. These include public securities investment funds and money market funds.
HSBC Hong Kong has partnered with HSBC China to provide HSBC GBA Wealth Connect services to customers in the GBA, whether they are just starting out or looking to expand their existing portfolios.
Customers who already have an HSBC China bank account in the GBA can apply for WMC Northbound Scheme services through the HSBC China mobile app, which offers an easy route for potential investors interested in the scheme. Customers can make an appointment to find out more by visiting any HSBC Hong Kong Wealth Management Connect Centre or HSBC branch, or simply contact their relationship manager.
HSBC is offering a remittance rebate of up to HK$300 for its HSBC GBA Wealth Connect-designated RMB Savings Account customers, with a minimum investment of 500,000 yuan via mobile or online banking, until December 31. Terms and conditions apply.
To learn more about HSBC’s offerings for capturing wealth opportunities in the GBA, visit www.hsbc.com.hk/banking/greater-bay-area.
Disclaimer from HSBC:
The HSBC GBA Wealth Management Connect Services and related offers are subject to the relevant terms and conditions. Investment involves risks. Currency conversion risk – the value of your foreign currency and RMB products will be subject to the risk of exchange rate fluctuation. If you choose to convert your foreign currency and RMB payments to other currencies at an exchange rate that is less favourable than that exchange rate in which you made your original conversion to foreign currency and RMB, you may suffer loss in principal/investment.