To fully implement the decisions and arrangements of the Central Committee of the Communist Party of China (CPC) and the State Council, put into effect the requirements laid down in the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, further advance financial opening-up and innovation, deepen financial cooperation between the mainland and the Hong Kong and Macao regions, ramp up financial support for the development of the Guangdong-Hong Kong-Macao Greater Bay Area (Greater Bay Area) and enhance the supportive and leading role of the Greater Bay Area in China’s economic development and opening-up, the following opinions are hereby proposed upon the approval of the State Council.
I. General Principles
1. Staying committed to serving the real economy. To satisfy the financial needs in high-quality economic development and trade and investment facilitation, measures should be taken to comprehensively promote innovative cross-border investment and financing, optimize the allocation of financial resources, elevate the efficiency of financial connectivity, improve the quality and effects of financial services and steadily advance RMB internationalization, thus providing robust financial underpinnings for the building of a dynamic and internationally competitive first-class bay area and a world-class city cluster.
2. Upholding cooperation to achieve mutual benefits and win-win results. Efforts should be made to innovate the pathways and models of financial cooperation between the mainland and the Hong Kong and Macao regions, promote the higher-level opening-up of the financial service sector to Hong Kong and Macao, support Hong Kong and Macao in their deep integration into China’s financial reform and opening-up, leverage the unique advantages of Hong Kong’s financial system under the policy of “One Country, Two Systems”, provide support to Hong Kong in consolidating and reinforcing its role as an international financial hub and enhance the financial complementarity, mutual assistance and interactions within the Greater Bay Area.
3. Sticking to the market-oriented philosophy. The decisive role of market in financial resource allocation should be fully tapped. The financial market reform should be deepened to advance the connectivity of the financial markets between Shenzhen and Hong Kong, facilitate financial connectivity in the Greater Bay Area and allow the market to decide the direction and amount of capital flows among diversified financial intermediary channels.
4. Resolutely guarding against systemic financial risks. A sound regional mechanism for the coordination of financial regulation should be established, and the risk control and prevention mechanism for cross-border capital flows be aligned with financial opening-up and innovation. Steady and orderly moves ought to be made to push ahead with various initiatives of financial opening-up and innovation in the Greater Bay Area in line with the principles of law compliance and controllable risks, and facilitate the implementation of any initiatives whenever they are well-established.
II. Facilitating Cross-border Trade, Investment and Financing in the Greater Bay Area and Making the Exchange between and Cross-border Circulation and Use of Domestic and Foreign Currencies More Convenient
5. Exploring higher-level pilot programs of trade and investment facilitation. Banks in the mainland part of the Greater Bay Area (namely the nine cities of the Pearl River Delta Region, similarly hereinafter), which conduct prudent and compliant operations, should be supported to apply more convenient measures for handling receipts and payments in trade for eligible enterprises, further simplify procedures for cross-border RMB businesses, push forward trade and investment facilitation and improve the business environment.
6. Improving foreign exchange management for new business forms in trade. Mainland residents in the Greater Bay Area, who are engaged in market procurement trade, cross-border e-commerce and other new business forms in trade, should be supported in opening personal foreign exchange settlement accounts with mainland banks in the Greater Bay Area (namely banks in the nine cities of the Pearl River Delta Region, excluding their branches in Hong Kong and Macao, similarly hereinafter) after they obtain foreign trade authorization and complete industry and commerce registration or other procedures for business licensing, and to sell and purchase foreign exchanges with relevant documents.
7. Moving ahead with capital account facilitation. A pilot program to facilitate the payment of income under capital account ought to be launched across the mainland part of the Greater Bay Area to streamline the management of foreign exchange sale and payment, improve relevant business procedures and exercise stronger oversight both during and after the handling of matters. Eligible non-banking debtors in the mainland part of the Greater Bay Area are allowed to register for foreign debt cancellation directly in banks, and the time limit for foreign debt cancellation of mainland enterprises in the Greater Bay Area should be removed. Steps should be taken to support mainland banks in the Greater Bay Area to directly conduct domestic payment with cross-border RMB funds under capital accounts such as direct investment, foreign debt and overseas listing according to the receipt or payment instructions of mainland enterprises in the Greater Bay Area, based on the know-your-customer, know-your-business and customer due diligence principle.
8. Exploring the building of an account management system to keep in line with the development of the Greater Bay Area. Authorities should study the building of a bank account system featuring the integration of RMB and foreign currencies in line with the development of the Greater Bay Area, with an eye to facilitating cross-border trade as well as investment and financing settlement. A pilot program where Hong Kong and Macao residents can open Category II and III personal settlement accounts with agency witness should be conducted to improve bank account opening services.
9. Exploring the construction of a cross-border wealth management connect scheme. Measures should be taken to support mainland residents in the Greater Bay Area to purchase wealth management products sold by banks based in Hong Kong and Macao through Hong Kong and Macao banks in the Greater Bay Area, and Hong Kong and Macao residents to buy wealth management products sold by mainland banks through mainland banks in the Greater Bay Area.
10. Launching a pilot program of integrated RMB and foreign currency cross-border cash pooling business. A pilot program should be carried out in the mainland part of the Greater Bay Area to further facilitate multinationals’ allocation and sweep of RMB and foreign currency funds between their domestic and overseas members, enable the conversion of domestic and foreign currencies in the pool as needed, and exercise macro-prudential management over cross-border cash pooling business.
11. Supporting banks to undertake cross-border lending business. Mainland banks in the Greater Bay Area should be supported to grant cross-border loans to institutions or projects in Hong Kong and Macao in accordance with the macro-prudential framework. Meanwhile, the mainland branches of banks based in Hong Kong and Macao should be encouraged to provide lending services for the development of the Greater Bay Area.
12. Steadily expanding the pilot program of cross-border transfer of assets. Seek to expand asset categories in cross-border transfer business, and incorporate them into the macro-prudential management of cross-border financing on a consolidated basis. Mainland financial institutions in the Greater Bay Area should be supported to conduct trade financing such as cross-border asset transfer in a regulated manner in line with the principle of business sustainability and based on the premise that risk control requirements are met.
13. Supporting the establishment of overseas RMB investment and lending funds. Encourage institutions in Guangdong, Hong Kong and Macao to co-establish overseas RMB investment and lending funds, which should be incorporated into the statistics of overseas RMB funds. The funds will raise RMB capital from institutions and individuals in the mainland, Hong Kong, Macao and those based overseas so as to provide investment and financing services for Chinese enterprises to “go global” to invest in and acquire businesses, and contribute to the development of the Belt and Road Initiative (BRI).
14. Supporting mainland non-banking financial institutions to conduct cross-border businesses with Hong Kong and Macao. Mainland institutions such as financial leasing companies, auto finance companies, securities companies, fund management companies, futures companies and insurance companies in the Great Bay Area should be supported to make settlement in RMB when conducting businesses such as cross-border financing, cross-border guarantee and cross-border transfer of assets in accordance with relevant regulations. Encourage eligible mainland finance companies, securities institutions and other non-banking financial institutions in the Greater Bay Area to conduct foreign exchange sales and purchases in an orderly manner, particularly to process spot foreign exchange sales and purchases as well as RMB and foreign exchange derivatives for their clients.
15. Carrying out a pilot program of cross-border investment by private equity investment funds. Institutional investors from Hong Kong and Macao should be allowed to invest in mainland private equity investment funds and venture capital investment companies (funds) in the Greater Bay Area through the Qualified Foreign Limited Partnership (QFLP) program. Steady progress should be made in advancing the pilot programs of Qualified Domestic Limited Partnership (QDLP) and Qualified Domestic Investment Enterprise (QDIE), and the overseas investment by mainland private equity investment funds should be supported. Macro-prudential management should be conducted over the aforementioned QFLP and QDLP/QDIE pilot programs, and mainland regulators should establish and enhance a sound joint review system so as to strengthen interim and ex-post oversight. Countercyclical adjustments should be made when appropriate in accordance with the status of balance of payments, in a bid to prevent risks concerning cross-border capital flows.
16. Improving the management and services of cross-border receipt and payment for insurance activities. Further facilitation should be provided for mainland banks in the Greater Bay Area with respect to insurance activities that comply with regulations of insurance and banking and existing foreign exchange management policies, specifically in cross-border fund remittance services such as claim settlement, insurance renewal and insurance surrender that are offered to mainland residents who have purchased insurance products from Hong Kong and Macao. RMB insurance funds in Hong Kong and Macao should be encouraged to flow back to mainland areas. Insurance companies in Hong Kong and Macao should be supported to legally acquire the qualifications of RMB Qualified Foreign Institutional Investor (RQFII) and Qualified Foreign Institutional Investor (QFII) to provide financing support for the development of the Greater Bay Area.
III. Further Opening up the Financial Sector and Deepening Financial Cooperation between the Mainland and the Hong Kong and Macao Regions
17. Further opening up the banking sector. Proactive support needs to be offered to financial institutions including banks in Hong Kong and Macao to seek further growth in the mainland part of the Greater Bay Area. Eligible banks of various types should be supported to set up new legal-person institutions, branches and franchisees to expand their businesses in the Greater Bay Area. Overseas banks should be supported to establish branches and subsidiary banks in the mainland part of the Greater Bay Area. Commercial banks should be supported to set up financial asset investment companies and wealth management companies without foreign ownership cap in the mainland part of the Greater Bay Area. Foreign investors should be encouraged to make equity investment in financial institutions such as trust companies in the mainland part of the Greater Bay Area. Research should be conducted on the establishment of a Guangdong-Hong Kong-Macao Greater Bay Area international commercial bank in the Guangdong Pilot Free Trade Zone.
18. Further opening up the securities sector. The orderly establishment of foreign-controlled securities companies, fund management companies and futures companies in the mainland part of the Greater Bay Area should be supported. Expand in accordance with the law the business scope of joint-venture securities companies. Foreign exchange authorities should work together with securities regulators to launch a pilot program of cross-border businesses in securities and futures institutions. Private funds based in Hong Kong and Macao should be supported to participate in financing innovative enterprises in the Greater Bay Area, and eligible innovative enterprises should be encouraged to raise funds and list in Hong Kong and Macao.
19. Expanding the opening-up of the insurance sector. Encourage the establishment of foreign-controlled life insurance companies, foreign-funded insurance groups, reinsurance agencies, insurance agents and independent appraisers in the mainland part of the Greater Bay Area. Eligible Hong Kong and Macao insurance agencies ought to be supported to establish operating offices in Qianhai of Shenzhen, Nansha District of Guangzhou and Hengqin of Zhuhai. A wider range of private capital should be encouraged to establish insurance corporations in the mainland part of the Greater Bay Area, and insurance companies should be supported to establish head offices for asset management, operations, R&D, backup services and data information in the Greater Bay Area. Insurance companies based in Guangdong, Hong Kong and Macao should be supported to work together to develop cross-border medical insurance and many more innovative products to provide customers with convenient services in underwriting, survey and claim settlement. The system of cross-border motor vehicle insurance ought to be improved. Motor vehicles of Hong Kong and Macao which enter Guangdong through the Hong Kong–Zhuhai–Macao Bridge (HZMB) enjoy the policy of “priority recognition of equally valid insurance policies.” Under the system, for cross-border motor vehicles insured with insurance companies in Hong Kong and Macao, if the scope of liability is expanded to cover mainland third-party liability insurance, they are deemed to have obtained mainland compulsory traffic accident liability insurance. In the meantime, efforts should be put into exploring how to support the insurance sectors of Hong Kong and Macao to set up insurance aftersales service centers in the mainland part of the Greater Bay Area under the framework of Closer Economic Partnership Arrangements (CEPA) between the mainland and the Hong Kong and Macao regions. Insurance companies based in the mainland part of the Greater Bay Area, and Hong Kong and Macao should be supported to conduct cross-border RMB reinsurance business.
IV. Promoting the Diversification of Guangdong-Hong Kong-Macao Financing Channels and Facilitating the Connectivity of Financial Markets and Infrastructures
20. Supporting the well-regulated establishment of funds in relation to the Greater Bay Area. Agencies from Guangdong, Hong Kong and Macao should be supported to jointly set up funds in relation to the Greater Bay Area in compliance with laws and regulations, and insurance funds and banks’ wealth management funds are supported to participate in such funds in accordance with relevant regulations. Endeavor to attract various types of private capital from the mainland, Hong Kong, Macao and abroad to provide financial support for infrastructure construction, modern industry development and major projects in the Greater Bay Area.
21. Supporting non-investment enterprises to pilot equity investment. Mainland non-investment enterprises in the Greater Bay Area are allowed to spend the income under the capital accounts or RMB funds acquired from foreign exchange sales on domestic equity investment programs in line with their production and business objectives. These pilot enterprises may directly transfer funds to investee enterprises according to the actual investment scale based on the premises of authenticity and law compliance.
22. Steadily promoting the connectivity of financial markets and infrastructures in Guangdong, Hong Kong and Macao. RMB clearing banks in Hong Kong and Macao ought to be gradually granted access to the mainland interbank lending market. Connectivity arrangements for financial markets (including exploring the possibility of launching the “south-bound” program in due time), such as the Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and Bond Connect ought to be optimized and enhanced. Qualified financial institutions and non-financial enterprises based in Hong Kong and Macao should be supported to issue bonds relevant to their industries and to issue debt financing instruments in the mainland in an effort to gradually expand the scope of issuing entities and varieties of domestic issuance instruments and currencies. Actions should be taken to advance cooperation on cross-border credit reporting. Credit reporting institutions in Guangdong, Hong Kong and Macao are supported to strengthen cross-border cooperation, push forward mutual recognition of credit information products and provide the Greater Bay Area with credit reporting services.
23. Promoting the development of offshore RMB markets. Hong Kong and Macao should be encouraged to develop offshore RMB business. Hong Kong should reinforce its position as the global offshore RMB business hub and develop more offshore RMB business, commodities and other risk management tools. Meanwhile, the cross-border use of RMB should gradually increase in scope and scale within the Greater Bay Area to facilitate the cross-border circulation and conversion of RMB in the Greater Bay Area.
24. Advancing cooperation in green finance in the Greater Bay Area. Building on the Pilot Zone for Green Finance Reform and Innovations of Guangzhou, actions ought to be taken to establish a sound green finance cooperation mechanism in the Greater Bay Area. The role of China Guangzhou Emissions Exchange should be brought into full play in building a platform for environmental rights transactions and financial services in the Greater Bay Area. A pilot program of carbon emission trading scheme featuring the use of foreign currencies ought to be launched. Those overseas investors (including overseas institutions and individuals) who have passed the qualification review by carbon emission exchanges based in the mainland part of the Greater Bay Area may engage in carbon emission trading of the mainland part of the Greater Bay Area with foreign currencies or RMB. Efforts ought to be made to probe into the establishment of the Guangzhou Futures Exchange, and explore unified green finance standards in the Greater Bay Area. More enterprises located in the Greater Bay Area should be encouraged to seek financing and certification for green projects through the platform of Hong Kong and Macao. Meanwhile, more financial institutions incorporated in Guangdong are encouraged to issue green bonds and other green financial products in Hong Kong and Macao, and to raise funds for green enterprises and projects in the Greater Bay Area. Hong Kong should be bolstered in its efforts to build a green finance center of the Greater Bay Area with the establishment of internationally-recognized green bond certification institutions.
25. Supporting Hong Kong and Macao to develop featured financial industries. Efforts will be made to give full play to Hong Kong’s leading role in the financial sector, to enhance its position as a global center for asset management and risk management, and to build an investment and financing platform for the BRI so as to provide investment, financing and consulting services for mainland enterprises to go global. Efforts will also be made to support Macao to establish a financial service platform for China and Portuguese-speaking countries, establish an export credit insurance system, build Macao into a RMB clearing center for Portuguese-speaking countries, provide financial cooperation services between both sides, support Macao to develop featured financial businesses such as leasing, and advance the building of the Demonstration Zone of Macao-Zhuhai Cross-border Financial Cooperation. In addition, support will be extended to Macao for joining the Asian Infrastructure Investment Bank (AIIB) when conditions permit. The Silk Road Fund and other relevant financial institutions are also encouraged to set up branches in Hong Kong and Macao.
V. Further Innovating Financial Services in the Greater Bay Area
26. Enhancing financial services to ramp up technological innovation. On the basis of law compliance and controllable risks, mainland banks in the Greater Bay Area are encouraged to enhance cooperation with venture capital institutions and actively explore diverse business models featuring finance-enabled technological development to develop a diversified, international and cross-regional investment and financing system for technological innovation, build a financial support platform for technological innovation and promote the commercialization of technological achievements. The cross-border capital flows of venture capital funds are facilitated to offer convenient cross-border currency exchange services to sectors featuring technological innovation. Under the legal framework of Guangdong, Hong Kong and Macao, research will be made into advancing the innovation of service models which align the financial sector with technological industries, and work will be done to build and improve infrastructure of big data in the Greater Bay Area with a particular focus on urban services such as finance, healthcare, transport, communities and schools.
27. Vigorously developing FinTech. Efforts will be made to deepen FinTech cooperation in the Greater Bay Area and strengthen the building of FinTech carriers. Based on the premises of law compliance and commercial voluntarism, a blockchain trade financing information service platform is to be set up so that participating banks could share and exchange the digital information of cross-border trade in a secure and reliable manner. Cutting-edge technologies including blockchain, big data and artificial intelligence (AI) and their mature applications, developed in the mainland part of the Greater Bay Area, are supported to be popularized in areas such as customer marketing, risk prevention and financial regulation. Efforts are also made to facilitate Hong Kong and Macao residents to make RMB payments using mobile electronic payment tools in the mainland and to advance the universal access to mobile payment tools across the Greater Bay Area. Moreover, non-banking payment institutions from the mainland are encouraged to expand businesses in Hong Kong and Macao.
VI. Effectively preventing Cross-border Financial Risks
28. Strengthening the cooperation in financial regulation among Guangdong, Hong Kong and Macao. A communication and coordination mechanism for financial regulation in the Greater Bay Area is to be put in place to strengthen exchanges over financial regulation among the three areas and address the existing problems in cross-border financial development and regulation. Actions will be taken to improve financial regulatory rules in innovation and explore the establishment of a regulatory “sandbox” of cross-border financial innovation. The responsibility of financial risk management in the mainland is to be strengthened and coordinated efforts are to be made to prevent and address cross-border financial risks. In addition, the training, exchange and cooperation of financial talents are also to be promoted in Guangdong, Hongkong and Macao.
29. Establishing and improving the early-warning, prevention and resolution systems for financial risks. The research and assessment of financial risks and the prevention and control of risks in key areas will be stepped up. Regional comprehensive financial statistics systems, economic and financial statistics systems, as well as the risk analysis, monitoring and early-warning systems are to be enhanced to enable prompt warning, early identification and timely resolution of financial risks. In the meantime, improvement of the financial security protection and emergency risk response mechanism will be made. The regulatory cooperation and information exchange mechanism in anti-money laundering, anti-terrorist financing and anti-tax evasion among Guangdong, Hong Kong and Macao will be enhanced. At the same time, regulation on cross-border financial institutions and cooperation in the monitoring and analysis of capital flows are also to be boosted to urge financial institutions to reinforce monitoring of abnormal cross-border capital flows and effectively combat cross-border money laundering, among other illegal financial activities.
30. Strengthening financial consumer protection in Guangdong, Hong Kong and Macao. Financial institutions are urged to improve the customer protection mechanism and take the main responsibility of consumer protection. A sound financial consumer protection system should be put in place in the Greater Bay Area. Cooperation among financial management institutions and associations in Guangdong, Hong Kong and Macao ought to be reinforced, and efforts should be made to explore and establish a multi-layered financial dispute resolution mechanism aligned with international practices. Moreover, investor education will also be strengthened to guide market entities to enhance their risk awareness.
The People’s Bank of China
China Banking and Insurance Regulatory Commission
China Securities Regulatory Commission
State Administration of Foreign Exchange
April 24, 2020
