Legislative Council Meeting Members’ Motions: Strengthening collaboration & building GD HK Macao Bay Area

MR CHAN CHUN-YING (in Cantonese):

Deputy President, the Guangdong-Hong Kong-Macao Bay Area (“the Bay Area”) has already become one of the regions in China with the greatest resources, highest degree of internationalization and most frequent cross-boundary interactions. It is the frontier where the country’s reform and opening-up are located and the most important engine of the country’s economic growth. As at the end of 2017, the GDPs of the 11 cities in the Bay Area amounted to more than RMB10,000 billion and their total economic volume surpassed that of the New York Bay Area, ranking themselves the second in the world. It is expected that by 2025, the total GDP of the Bay Area may surpass that of Tokyo Bay Area and become the bay area with the world largest economy.

Located in the Bay Area are Hong Kong, which is one of the three international financial centres in the world, and Shenzhen and Guangzhou, which respectively rank 20th and 32nd in the latest list of world financial centres. Almost all financial activities in the world can be found here. At present, the financial sector of the Bay Area as a whole reaches an international scale. As at end of 2017, the total bank assets in the three places exceeded US$7,000 billion, and bank savings totalled at US$4,700 billion; both surpassed those in the New York Bay Area and San Francisco Bay Area. In 2017, insurance premium revenue generated in the Bay Area amounted to US$128 billion, which is equivalent to a quarter of the total insurance premium of the whole country. The main board market values of the Hong Kong Stock Exchange and Shenzhen Stock Exchange exceeded US$5,500 billion, which is the fourth highest in value in the world. All of the above have laid down an important foundation for deepening the financial cooperation in the Bay Area.

The Belt and Road initiative, the internationalization of Renminbi, the upgrading of the free trade zones and liberalization of the service trade are all favourable factors that strengthen Hong Kong’s role as an international financial centre and global offshore Renminbi business hub. These factors also provide an impetus for Guangdong, Hong Kong and Macao to develop into the most active, open and innovative region in China in cross-bounder financial activities, and ultimately develop the Bay Area into a world-class financial capital and a major financial centre along the Belt and Road route.

Deputy President, on the whole, capital will not be an issue in the financial cooperation of the Bay Area. The most important issue is breaking the barriers of the systems and stepping up reform on cross-bounder financial development. In the future, the three places can further deepen financial cooperation on innovative finance, silk road finance, livelihood finance and green finance.

First, it is developing innovative finance to facilitate further integration of financial services with innovative technologies. In the future, innovative finance, which is best represented by venture capital and risk investment, will become an important impetus for the economic cooperation in the Bay Area. This impetus will drive forward the development of innovative technology, cultural and creative industries, and also the development of traditional financial services such as enterprise financing, consumer financing and financial management, so as to provide better business opportunities for Hong Kong’s financial sector.

Second, it is developing silk road finance to jointly develop a financing platform for the Belt and Road. It takes a lot of capital to take forward the Belt and Road initiative. Up to 2030, the Asian Development Bank will need to inject more than US$26,000 billion in its Asia-Pacific infrastructural investments. How to secure a good financing arrangement will be the key. It has been a common practice for Mainland enterprises to make use of Hong Kong to get hold of silk road investment opportunities by sea, and the Bay Area can deepen cooperation in this regard by combining equity financing and debt financing, or by combining direct and indirect financing, so as to provide an all-round financing arrangement for enterprises that have gone global.

Third, it is developing livelihood finance to bring convenience to Hong Kong people who go and live in the Bay Area. A key content in the Development Plan for a City Cluster in the Guangdong-Hong Kong-Macao Bay Area is to jointly build a quality living circle to provide an ideal place for living, working and travelling. With the commissioning of the Hong Kong-Zhuhai-Macao Bridge and the Guangdong-Shenzhen-Hong Kong Express Rail Link, the Bay Area will form a one-hour living circle. More and more Hong Kong people, or expatriates living or working in Hong Kong, will have an opportunity to go to the Mainland, especially the Pearl River Delta, to set up their business, to study, to work, to travel, or for recreation and retirement. They may even choose to live there. A foreseeable trend is that Hong Kong people and Hong Kong enterprises will increasingly need to make cross-border payments when they make investments or spending in the Bay Area.

Financing convenience involves different financial regulatory policies and legal requirements between the Mainland and Hong Kong. These hurdles have to be overcome one by one through negotiation. It is best to tackle the easy ones first and the difficult ones later. We should first explore proposals on facilitating cross-boundary financial services for Hong Kong residents, including making it easier for Hong Kong residents to open a bank account in banks in Pearl River Delta, so that Hong Kong residents can easily make cross-border payments for travel, spending, property financing, health care, schooling, currency exchange and financial management. We can progress gradually from one-way to dual-way payment, with a view to forming a holistic development of the Bay Area.

Lastly, it is developing green finance to jointly build a low-carbon and sustainable living environment. We must actively develop green financing in order to promote green development. Actually, Hong Kong possesses the unique criteria to play a vital role in developing green bonds and green financing, so as to establish ourselves as the major green financing hub in the Bay Area, thereby providing the capital and financial support to build an environmental-friendly and low-carbon bay area.

Deputy President, all in all, innovative finance, silk road finance, livelihood finance and green finance will be the four major areas to deepen the future financial cooperation in the Bay Area. The three places should make good use of this edge and proactively establish, or firmly establish, the Bay Area as the leader in these areas, so as to turn it into a financial capital for the Belt and Road countries, or even the world.

I support Mr Jeffrey LAM’s motion and other Members’ amendments that are in line with strengthening regional cooperation and jointly establishing the Bay Area. I so submit. Thank you, Deputy President.