PBOC, HKMA unveil measures to promote market connectivity

The People's Bank of China and the Hong Kong Monetary Authority on Wednesday announced six new measures involving financial market connectivity, cross-border capital facilitation, and deepening financial cooperation.

The financial market connectivity-enhancing measures include allowing bonds under Bond Connect as eligible collateral for the renminbi liquidity arrangement of the HKMA, further opening up foreign investors to participate in domestic bond repurchase business, and expanding and facilitating individual investment channels in the Guangdong-Hong Kong-Macao Greater Bay Area.

Regarding cross-border capital facilitation, PBOC and HKMA recommend implementing policies to facilitate payment for home purchases by Hong Kong and Macao residents in the GBA, expanding the scope of pilot projects for cross-border credit reporting cooperation between Shenzhen and Hong Kong, and deepening the cross-border pilot program of digital renminbi for Hong Kong and mainland resident enterprises.

"We thank the relevant central ministries and financial regulators for their support and help in the development of Hong Kong as an international financial center. These measures will strengthen Hong Kong's unique role and capability in connecting the mainland and international markets, as well as investors," Financial Secretary Paul Chan Mo-po told reporters on the sidelines of the Asian Financial Forum.

The HKSAR government will work with regulatory agencies to implement the measures, he added.

Governor of the central bank, Pan Gongsheng, said, "The PBOC has always supported the construction of Hong Kong's offshore renminbi hub, promoted the high-level opening of the Chinese mainland's financial industry to Hong Kong, firmly supported Hong Kong's status as an international financial center, and maintained Hong Kong's long-term prosperity and stability."

Meanwhile, PBOC Deputy Governor Xuan Changneng said the country's central bank will work closely with the mainland and Hong Kong's financial regulatory authorities to jointly promote the implementation of various policy measures, further optimize financial services, strengthen financial cooperation, and promote the development of Hong Kong as an international financial center.

"As Bond Connect has been optimized in the last few years, mainland bonds have become part of the asset allocation of international investors. I hope the collateral function of mainland bonds can be strengthened so as to facilitate international investors to revitalize their positions, and use their bond holdings to manage liquidity flexibly," said HKMA Chief Executive Eddie Yue Wai-man.