Recently, the CPC Central Committee and the State Council issued the "Overall Plan for the Construction of the Hengqin Guangdong-Macao In-depth Cooperation Zone" (hereinafter referred to as the "Plan"). Among them, the guiding ideology requires vigorously developing new industries that promote the moderate diversification of Macao's economy, accelerating the construction of a new home that facilitates the life and employment of Macao residents, and striving to build a new system of high-level integration and opening up with Macao. With the announcement of the Plan, the development opportunities of the cooperation zone in cross-border financial connectivity and the development of modern financial industry have gradually become prominent.
"Supporting the cooperation zone to expand the opening up of Macao's financial sector is conducive to guiding more international funds to invest in the development of the zone and promoting industrial development in the zone." Cheng Shishi, chief economist of ICBC International, said in an exclusive interview with Nandu reporters, "The cooperation zone will play a crucial pioneering role in exploring the free flow of cross-border capital. ”
Dr. Cheng Shi, Chief Economist of ICBC International
It is conducive to guiding more international funds to invest in the development of the region
Nandu: "Hengqin Guangdong-Macao In-depth Cooperation Zone Construction Overall Plan" was issued on September 5, what is your biggest feeling after reading this "Plan"? What are some of the contents of the Plan that you are particularly concerned about?
Cheng Shi: My overall feeling is very exciting and very much looking forward to it. What impressed me most was the core feature of the "all-round, multi-level and large-scale" design of the program at the top level.
The "Overall Plan for the Construction of Hengqin Guangdong-Macao In-depth Cooperation Zone" is another programmatic document supported by the central government for the development of the Guangdong-Hong Kong-Macao Greater Bay Area, which specifically plans the cooperative relationship between Hengqin, Macao and Guangdong to promote integrated development. The plan covers industrial development, financial opening-up, education, people's livelihood and other aspects, setting the direction for Macao to further integrate into the overall situation of national development and give play to regional advantages, and will greatly help Macao to diversify its industries and achieve the sustainable development goals.
The "Plan" also implements the classification management of the cooperation zones, and the Hengqin Campus of the University of Macau and the Macao Jurisdiction of the Hengqin Port are authorized to be managed by the Macao Special Administrative Region, and the relevant systems and regulations of Macao are applied, which is also a new attempt for regional cooperation in the Guangdong-Hong Kong-Macao Greater Bay Area.
Nandu: The document proposes to expand the opening up of the financial industry to the outside world and promote the reform of the financial industry in the Hengqin Guangdong-Macao In-depth Cooperation Zone.
Cheng Shi: I have noticed that the "Plan" mentions that "the real economic development of Hengqin is not yet sufficient, the characteristics of serving Macao are not obvious enough, the integrated development with Macao still needs to be strengthened, and there is still a long way to go to promote the diversified development of Macao's industries." "I believe that Macao, as a window to Portuguese-speaking countries, has a natural advantage in introducing investors from Portuguese-speaking countries.
The Plan also plans to "give full play to Macao's role as a window for Connecting Portuguese-speaking Countries and support the Cooperation Zone to build a financial service platform for China-Portuguese-speaking countries." Encourage social capital to set up multi-currency venture capital funds and private equity investment funds in accordance with the principle of marketization, and attract foreign investment to increase support for high-tech industries and innovation and entrepreneurship in cooperation zones. "In fact, guangdong-Macao financial cooperation and supporting the cooperation zone to expand the opening up of Macao's financial sector will help guide more international funds to invest in the development of the zone and promote industrial development in the zone." Expanding the hinterland of Macao's service industry is also conducive to Macao's own development and maintaining long-term stability and prosperity.
Nandu: The "Plan" mentions that it is necessary to "strengthen the linkage between the financial market of the cooperation zone and the offshore financial markets of Macao and Hong Kong", what new directions do you think are worth exploring?
Cheng Shi: The cooperation zone is positioned as an important fulcrum of the international science and technology innovation center of the Guangdong-Hong Kong-Macao Greater Bay Area, and vigorously develops the high-end manufacturing industry of integrated circuits, electronic components, new materials, new energy, big data, artificial intelligence, biomedicine, etc., and is in great need of financial support. In conjunction with the offshore financial markets of Macao and Hong Kong, and in conjunction with financial opening measures, the Zone can provide R&D funds for enterprises in the Zone by introducing various venture capital funds or private equity funds.
Exploring cross-border capital free flow cooperation zones will become an important pilot
Nandu: In fact, among the 80 financial measures issued by Guangdong to support the construction of the Guangdong-Hong Kong-Macao Greater Bay Area, there have been some explorations in cross-border financial interconnection, what do you think is the significance of the introduction of the new plan to promote cross-border financial connectivity business? In what specific ways can we exert our strength?
Cheng Shi: Under the unprecedented changes in a century, the global financial market fluctuates violently, and cross-border financial uncertainty is very troubled, and the 80 financial policies supporting the Guangdong-Hong Kong-Macao Greater Bay Area have reassured the market, which plays an important role in cross-border financial pursuit and avoidance of harms and innovative development. The Plan supports the development of cross-border RMB settlement business in the cooperation zone, encourages domestic and foreign investors to use RMB, helps to expand the scope of overseas RMB use, and cooperates with cross-border wealth management interconnection measures, which will help accelerate the process of RMB internationalization.
Nandu: The Plan mentions that "it will further promote the facilitation of new international trade settlements such as cross-border e-commerce" and will "support the development of cross-border RMB settlement business in cooperation zones, and encourage and support domestic and foreign investors to use RMB in cross-border venture capital and related investment trade". Do you think the digital yuan will help the development of cross-border RMB settlement business? What are the possible directions for the application of digital RMB in Hengqin Guangdong-Macao Deep Cooperation Zone?
Cheng Shi: For the digital yuan, the pilot promotion has always been in progress, and will enter a climax stage due to the application of the scene of the 2022 Winter Olympics. In this process, the cooperation zone has always been actively participating and playing an important role in expanding the development path of the digital yuan. The Guangdong-Hong Kong-Macao Greater Bay Area has gathered many Internet innovation enterprises, and these major forces in China's digital economy will help promote the digital yuan from the micro level and application perspective. From the perspective of application scenarios, the more mature areas of digital payment are the directions in which the digital yuan may expand.
Nandu: The "Plan" mentions exploring the free inflow and outflow of cross-border capital in the cooperation zone and promoting the convertibility of the capital account, what are the development prospects for the cooperation zone?
Cheng Shi: Cross-border capital inflow and outflow and capital account convertibility have always been the key strategies of China's financial opening up, and the promotion of this strategy is a gradual process, and the cooperation zone, as a region with a better financial foundation and a higher pattern of opening up, will play a crucial pilot role in this strategy, and the "Plan" reflects this very well.
Nandu: Combined with the needs of RMB internationalization, some scholars have proposed that a comprehensive securities market denominated in RMB can be built in Macao, what do you think is the significance of the relevant policies for the development of the Hengqin Guangdong-Macao Deep Cooperation Zone for financial innovation in this regard? What other issues need to be addressed?
Cheng Shi: The "Plan" will help high-end enterprises in the cooperation zone to accelerate their development, and if Macao builds a comprehensive securities market denominated in RENMINBI, high-quality enterprises in the cooperation zone can provide rich corporate resources for the securities market.
However, judging from international experience and actual situation, building a securities market requires a strong economic foundation, and the hard conditions that Macao has accumulated so far may not be sufficient, so it will take time to build a securities market. At present, Macao's industrial structure based on leisure tourism is relatively single, financial institutions are mainly commercial banks, there is a lack of international investment banks, and there is a lack of professional talents in the financial industry, and it is necessary to establish a financial supervision and compliance system that is in line with international standards, and these basic supporting facilities require a long period of preparation. The relevant policies of the cooperation zone are expected to consolidate these basic creation conditions.
Carrying out pilot projects for security management of cross-border data transmission provides a favorable environment for financial opening up
Nandu: There are certain differences between Macao and the mainland in terms of monetary system and financial institution system, while promoting the development of cross-border financial business, what aspects of cross-border financial supervision in the cooperation zone need to be reformed and innovated in a timely manner? In what way should we cooperate in financial supervision and joint efforts in financial innovation and financial exchanges?
Cheng Shi: Although there are certain formal and degree differences in the development of financial business in the cooperation zone, fundamentally speaking, the underlying logic and risk elements of the financial industry are common, which sets a unified tone for coordinating financial supervision. Although there are two special environments, three jurisdictions and three currencies in the mainland, Macao and Hong Kong, the problems can be solved through institutional innovation. Taking the Shanghai-Shenzhen-Hong Kong Stock Connect and Bond Connect between the mainland and Hong Kong as examples, it is through financial innovation to manage closed-loop transactions, while achieving cross-border capital flows, but also effectively controlling risks.
An important basis for cross-border financial supervision is the coordination and unification of regulatory concepts, and under the unprecedented changes in a century, this unified tone is to prevent systemic risks, protect small and medium-sized financial participants, promote financial support for the real economy, and promote inclusive finance and green finance. In terms of development prospects, with the further improvement of the economic fit of the Greater Bay Area, the connection of financial bloodlines will also be closer, and regulatory cooperation is also expected to be strengthened.
Nandu: Will the pilot project of security management of cross-border data transmission proposed in the new plan promote cross-border financial innovation and cross-border financial supervision and make breakthroughs?
Cheng Shi: Carry out a pilot project of security management of cross-border data transmission, standardize the management of data entry and exit, which is conducive to protecting personal information and important data, and at the same time, can improve the protection of national security and financial security. With national security and financial security guaranteed, it will provide a favorable environment for more financial openness and financial innovation policies.
Written by: Nandu reporter Xiong Runmiao intern Lan Ziwei