Beijing (PingWest)—China's central bank, the Hong Kong Monetary Authority (HKMA), and the Monetary Authority of Macao on Monday jointly announced the introduction of wealth management connect pilot scheme (WMC) in the Guangdong-Hong Kong-Macao Greater Bay Area and unveiled the scheme's overall policy framework, according to Xinhua News Agency.
The central bank said that it would allow Hong Kong Special Administrative Region (HKSAR) and Macau SAR residents to invest in wealth management products sold by Chinese banks in mainland cities in the Greater Bay Area, while also allowing residents in the region to purchase products sold by Hong Kong and Macau banks.
Mainland China has strict capital controls, while Hong Kong and Macau do not. WMC is seen as part of the plan to move forward the Greater Bay Area. Since the plan was proposed last year, the Chinese government has been facilitating it, which aims to build an economic powerhouse in southern China and further integrate Hong Kong and Macau with the mainland.
“The launch of WMC demonstrates the strong support of the central government and the importance it attaches to financial development in the Greater Bay Area, underlining the solid backing from the country and it also shows that Hong Kong continues to play a leading role in the country's economic development and opening up of financial markets," Carrie Lam, Chief Executive of HKSAR, said.
Paul Chan, Financial Secretary of HKSAR, said that WMC opens up a broader market for the financial sectors of Guangdong, Hong Kong, and Macau, and provides more wealth management product choices for the residents in the Greater Bay Area, thereby promoting the cross-boundary flow and use of Renminbi (RMB) and reinforcing further Hong Kong's position as the global offshore RMB business hub.
Currently, China is trying to impose a new national security law on Hong Kong, which has triggered huge controversy because some worry that the judicial system and financial status of the autonomous region will be threatened .