Date: 15 May 2020
- Beijing explore wealth management connect, the first in bay area
- Insurers hope to set up services centre in bay area
The Greater Bay Area, with a total population of 70 million people across 11 cities and a projected economy estimated at US$1.5 trillion, is the world’s 13th-largest economy – ahead of Spain and behind South Korea – if it were a stand-alone economic entity.
In all, 2,135 funds authorised by Hong Kong’s Securities and Futures Commission (SFC) stand to benefit if they are made available for sale throughout the GBA, with US$1.78 trillion of assets under investments spanning stocks, bonds and other financial products.
“The guidelines shed more light on the way forward, and the fund management industry warmly welcomes this,” said Sally Wong, chief executive of the Hong Kong Investment Funds Association (HKIFA), the industry guild for international funds. “These SFC authorised funds offer a wide array of investment options, are well-regulated and have a very robust investor protection mechanism.”
Hong Kong’s insurance companies, which may be allowed to set up service centres in the GBA, are also eyeing the Wealth Management Connect to sell funds across the border.
“It will help provide better services to the mainland Chinese customers, and help overcome the inconveniences posed by the entry restrictions [into Hong Kong] during the Covid-19 pandemic,” said Eric Hui Kam-kwai, chairman of the Hong Kong Federation of Insurers (HKFI).
Mainland Chinese customers bought HK$72.68 billion (US$9.4 billion) in insurance policies in Hong Kong in 2016 during the height of the cross-border influx, or 39 per cent of all premium collected in the city. This declined to HK$43.4 billion last year as Chinese regulators tightened their currency outflow rules to staunch capital flight, while anti-government protests in Hong Kong deterred Chinese visitors.
“The initiatives will further facilitate cross-border trade and investment, deepen Renminbi (RMB) internationalisation, promote financial connectivity and green finance in the GBA,” HSBC’s Asia-Pacific chief executive Peter Wong Tung-shun said in a written statement. “The GBA has the scale to rival well-known city clusters such as the New York Metropolitan Area, the San Francisco Bay Area, and the Tokyo Bay Area.”