China announces slew of financial support measures for Macau and HK

The Chinese government today announced several new financial measures to support cross-border transactions and investments between Hong Kong, Macau and cities in southern China, news agency Bloomberg reported.

Accoridng to the report, the People’s Bank of China and other banking, securities and foreign exchange regulators announced several new policies to support the development of the Greater Bay Area, such as allowing Hong Kong and Macau citizens to buy wealth management products issued by mainland lenders in the region and vice versa.

The plan also aims to support the offshore RMB business in both SARs; setting up a futures exchange in Guangzhou; allowing the raising of RMB-denominated funds to support the One Belt & One Road initiative; testing a cross-border cash pool business; supporting cross-border bank lending, and supporting payment service providers business expansion.

The announcement comes as the two SARs and the regions are recovering from the Covid-19 pandemic, with Macau not reporting any new cases for 36 days and Hong Kong not reporting new local cases after 24 consecutive days without cases.

The policies are also in line with the Greater Bay Area development plan devised by Beijing and announced last year.

In July of last year, the Chinese Ministry of Finance and the Macau government also launched about RMB2 billion (MOP2.3 billion/US$290.9 million) worth in bonds backed by the Chinese government – the first time such as been done in Macau – with RMB1.7 billion made available for institutional investors and the remaining for local private investors.