GBA moves ahead on cross-border wealth management business
Plans by stock exchanges, insurers for more connectivity and collaboration
28 May 2020 | Janette Chen

Chinese regulators have called for insurers in the Guangdong-Hong Kong-Macau Greater Bay Area (GBA) to roll out more cross-border products and are discussing rules to enable GBA residents to purchase cross-border wealth management (WM) products.

China's annual “Two Sessions”, the policy-making meetings held by the country's top legislature and political advisory bodies, now being held in Beijing after being postponed by two months, are addressing these issues.

During the meeting, Charles Li, chief executive of Hong Kong Exchange and Clearing (HKEX), said that the Stock Connect programme, a cross-boundary investment channel that connects the Shanghai Stock Exchange and the HKEX, can begin consideration of its implementation in the primary market and pilot programmes within the GBA.

China also continues to explore opportunities for further GBA collaboration and development. The country’s policy bank, China Development Bank (CDB), will provide 360 billion yuan (US$50.5 billion) of financing support to the GBA in 2020. This plan includes 290 billion yuan of loans, of which 110 billion yuan will be spent on technological innovation and emerging industries.

The China Banking and Insurance Regulatory Commission (CBIRC) has also created a specialized department to support GBA development. One of its major initiatives involves enhancing the connectivity of the insurance institutions in the GBA.

Insurers in Guangdong, Hong Kong and Macau are being encouraged to roll-out cross-border auto and medical insurance plans. Early this month, China's State Council, the People's Bank of China, CBIRC, and China Securities Regulatory Commission published guidelines for insurers aimed at promoting the roll-out.

The regulators, according to the guidelines, plan to create a cross-border WM mechanism that will enable Guangdong residents to purchase WM products through Hong Kong and Macau banks, and conversely Hong Kong and Macau residents to buy through Chinese banks in the GBA.

Have you read?