Hong Kong file photo
Key Chinese lawmakers and policy advisers call on the country to put in place a European-style ‘passport’ mechanism for financial services in the Guangdong-Hong Kong-Macao Great Bay (GBA) region to enable seamless integration between Hong Kong and Macao regions and the Chinese mainland as part of China’s financial openness effort.
The proposals and suggestions were submitted during the two sessions in Beijing by deputies from the National People’s Congress (NPC), the supreme legislative body, and members of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC). . Considered the most important political event in China, the two sessions kicked off Thursday with the opening meeting of the CPPCC.
In his proposals, Bai Hexiang, deputy to the AFN and head of the Guangdong branch of the People’s Bank of China, urged exploration of what he called a “one-pass” mechanism and others. reforms to strengthen financial connectivity in the GBA.
The ‘one-pass’ mechanism has been compared to the EU passport system for banks and financial services companies, which allows businesses to operate in any other state in the European Economic Area without the need to apply. a separate authorization.
As China has released sweeping development plans to build a world-class economic zone in the GBA, including a global financial center, talks about financial integration – particularly a “one-way pass” – have been raised at many times. But as China seeks to open up more and cooperate more, the proposals and suggestions from both sessions are gaining ground.
Besides Bai, Peter Wong Tung Shun, member of the CPPCC National Committee and Managing Director of Hong Kong and Shanghai Banking Corp (HSBC), also suggested that a “one-pass mechanism” should be put in place for clients. licenses and qualifications of financial institutions. in the GBA region, and a “highway” should be built for cross-border financial services and capital integration.
Integrating financial regulations and laws into the GBA will help create “seamless connectivity” and a synergistic effect within the region, Liang Haiming, chairman of the China Silk Road iValley Research Institute, told the Global Times on Thursday. .
“The demand for talent and capital mobility is increasing in the Grande Baie region, with more and more start-ups established in the region and seeking capital,” Liang said. “Large companies like Tencent are already listed in Hong Kong, and small companies will want to do the same as well.”
While it remains to be seen whether a “one-pass” mechanism will soon be put in place, the GBA’s main development plans contain sweeping measures to strengthen financial connectivity between Hong Kong, Macao and mainland China. The GBA has also been touted as an essential part of China’s comprehensive financial openness.
In addition to the “one-time pass” mechanism, AFN MPs and CPPCC National Committee members called for more innovative financial development in the GBA.
In other proposals, Bai also called for the use of the digital yuan in cross-border transactions, as well as the establishment of an IPO connection, an insurance connection and a connection for the carbon market in the GBA.
Residents of Hong Kong and Macao Special Administrative Regions should also be able to request financial services from institutions on the Chinese mainland with their credit records from their own regional markets, according to Wong’s suggestion shared with the Global. Times Thursday.
The proposal will meet growing demand from Hong Kong and Macau to work on the mainland, he said.
According to Liang, different regulations and management practices, such as separate credit systems in Hong Kong and the mainland, cause inefficiency and create loopholes.
“The authorities are unable to verify the credit status of people who wish to operate a business that crosses borders,” Liang said. “In practice, a bankrupt person in Hong Kong might still be eligible for a bank loan in Guangdong.”
Liang also said that for better financial connectivity, more mechanisms for investors to participate in cross-border financing, including in insurance and futures transactions, should be introduced in the GBA.