The Director of the University of Macau (UM) Asia Pacific Academy of Economics and Management told Lusa that Hong Kong and Macau could become important markets for finance and green bonds for Portuguese-speaking countries.
“The estimated demand for ‘green’ finance and ‘green’ bonds for Portuguese-speaking countries is high because many of them are developing countries, which try to increase growth at lower costs,” said Jacky So Yuk-Chow.
Hong Kong and Macau “are both a free zone and low-rate ports”, which is why “capital can come and go without much trouble, which can be very attractive to international investors,” added the professor.
In other words, he concluded, “perhaps Hong Kong and Macau could become the first and second markets for ‘green’ finance and ‘green’ bonds for Portuguese-speaking countries”, referring to this emerging financial market for debt associated with environmentally friendly investments.
In the case of Macau, the city “has a comparative advantage because of its history, culture and language” linked to Portugal, all the more so because “it could offer diversification benefits for the industry of integrated ‘resorts’ and casinos”, he maintained.
Jacky Yuk-Chow So recalled that the Greater Bay Area, which includes Hong Kong, Macau and nine Chinese cities in Guangdong province, “has accumulated a lot of capital and is looking for investment opportunities”, something that can be used by the speaking countries Portuguese.
In the specific case of ‘green’ bonds and Portuguese-speaking developing countries, many “need guarantees from the World Bank and/or the International Monetary Fund (IMF) for their loans/bonds in order to reduce interest costs”, at least that this is an attractive form of financing, stressed the UM specialist.
In addition, the latest reports from the World Bank, the Organization for Economic Cooperation and Development (OECD) and other international entities “point out that Brazil, China, and one or two Portuguese-speaking countries are quite successful in using finance ‘green’ and ‘green’ obligations to address environmental problems ”, with“ Brazil and China […] among the main issuers of ‘green’ bonds ”, he stressed.
“Many of these [Portuguese-speaking] countries are specialized in agriculture and marine products. Water pollution and soil pollution are more serious in these countries. In addition, […] they do not have enough capital to solve many pollution problems, which require a lot of capital,” he explained.
In October, the Bank of China in Macau carried out ‘green’ bond issues worth RMB 7 billion (US$876.8 million) in three currencies (dollar, euro and renminbi) “which included Portuguese-speaking customers,” Bank of China told Lusa.
“Based on the global trend of ‘green’ development and in line with the national development plan, the Government of Macao [Special Administrative Region of Macau] recently announced four aspects to promote the development of ‘green’ finance”, recalled the same bank entity.
“Among them, ‘green’ bonds are the entry point for the development of ‘green’ finance in Macau. In addition to improving some legal regulations, it will gradually reduce the cost of issuing to help attract more institutions to issue green bonds in the territory,” stressed the Bank of China.
However, “according to the market, no issuer in Macau has announced that it will issue ‘green’ bonds in the near future,” the institution said.
‘Green’ finance and bonds have been singled out by the Macau authorities as one of the bets for a future renminbi stock market to develop “a modern financial industry, diversification of the economy and strengthening cooperation projects between China and Portuguese-speaking countries.
A strategy that crosses with Macau’s status as a platform for economic and commercial services between China and Portuguese-speaking countries and the new role of the territory in the Beijing project to create the Greater Bay Area, a world metropolis with around 70 million inhabitants and with a Gross Domestic Product (GDP) of around 1.2 billion euros.