On 15 September 2022, the Faculty of Finance of the City University of Macao held the Finance Seminar Series [1] Luso Bank Financial Forum at the Ho Yin Convention Centre. Dr. Tao Ren, Research Associate of the National Institution for Finance & Development and Deputy General Manager of Development Research Department of Luso International Banking Ltd., was invited to deliver a speech titled “Policy Interpretation of Guangdong-Hong Kong-Macao Greater Bay Area and Financial Development with Hong Kong and Macao Characteristics”. Guests attending this seminar include Dean Adrian Cheung, Associate Dean Eva Khong and Lecturer Simon Sou of Faculty of Finance, City University of Macao.

To begin with, Dr. Tao Ren introduced the general situation of the Guangdong-Hong Kong-Macao Greater Bay Area(GBA). In 2015 and 2018, the State Council and the Central Bank successively issued the implementation plan of the China (Guangdong) Pilot Free Trade Zone. In 2019, the CPC Central Committee and the State Council jointly issued the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, and in 2021 and 2022, Hengqin, Qianhai and Nansha were officially taken as the three major areas to promote the deepening of reform. Dr. Ren briefed on the financial support initiatives of the three major areas. Hengqin supports the cooperation zone to build a financial service platform between China and Portuguese-speaking countries, supports the cooperation zone to carry out cross-border RMB settlement business, supports Macao to develop wealth management, bond market, financing lease and other modern financial industries in the cooperation zone, opens up to Macao to expand service areas, and lowers the entry threshold for Macao-funded financial institutions to set up banks and insurance institutions; Qianhai has taken the lead in areas such as connectivity with Hong Kong’s financial market, cross-border use of RMB, and facilitation of foreign exchange management; accelerate research on the establishment of a GBA International Commercial Bank in Nansha.

Dr Ren then briefly introduced the development of the financial industry in Hong Kong and Macao. Hong Kong’s banking industry has gathered 70 of the world’s top 100 Banks. Hong Kong is the leading bond hub in Asia, and the third largest bond market in Asia (except Japan) in terms of circulation, second only to mainland China and South Korea. Hong Kong also has the largest international fund management centre and international private wealth management centre in Asia, and is the largest offshore RMB fund pool in the world. About two-thirds of China's domestic and foreign investments are made through Hong Kong. In Macao, the financial industry is the third largest industry in Macao, second only to the gambling and real estate industries. Banking is the main industry and is supplemented by the insurance industry. Macao's financial system is a modern and open financial system with regional characteristics, among which banking plays an important role in Macao's financial system. There are 31 banks in Macao, which can be divided into four types: local capital, Chinese capital, Portuguese capital and foreign capital. Chinese banks are the main force in Macao's banking industry. Macao is an independent banking supervision area with dense banking outlets. Benefiting from the rapid economic growth of the country and the SAR, the banking industry in Macao has developed steadily and rapidly. Over the years, it has played an important role in promoting the moderately diversified development of Macao’s real economy. In recent years, the status of Macao’s banking industry has significantly improved, and its weight in Macao’s economy has continued to rise. At present, its contribution to GDP has reached about 14% and has achieved the target set by the Macao Monetary Authority to raise the proportion of financial industry GDP to 10% after the medium and long-term plan for moderate economic diversification was proposed.

Dr. Ren introduced the development of the financial industry in the GBA and the In-Depth Cooperation Zone. The GBA is a city cluster formed by nine cities including Guangzhou, Foshan, Zhaoqing, Shenzhen, Dongguan, Huizhou, Zhongshan, Zhuhai, Jiangmen and two special administrative regions, Hong Kong and Macao. It is an important gateway to connect “The Belt and Road Initiative” and promote enterprises in the GBA to jointly “go global”, among which Hong Kong has the highest financial depth, followed by Guangdong and Macao. Hong Kong and Macao are both free ports and offshore financial centers with a high degree of internationalization. Bond issuance in Macao will deal with funds from all over the world, including mainland, Hong Kong, Macao, and Southeast Asia, so as to provide global investors with high-quality investment targets and implement the integration of Hong Kong and Macao and the connectivity of the GBA. At present, a total of 15 overseas banks have institutional layout in the GBA. It can be seen that the future of Hong Kong and Macao lies in the GBA, and the future of Macao lies in the In-Depth Cooperation Zone. The integration of Hengqin and Macao makes the In-Depth Cooperation Zone more oriented than the Free Trade Area, so as to lead the GBA, integrate into the free port and connect with the Asia-Pacific.

Dr. Ren pointed out the development orientation of Macao’s financial industry in the GBA by citing different published schemes and measures. The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area supports Macao to become an RMB clearing center for Portuguese-speaking countries, enables the headquarters of the China-Portuguese Speaking Countries Cooperation and Development Fund to be settled in Macao, builds a Macao-Zhuhai cross-border financial cooperation demonstration zone, supports Macao to develop characteristic finance and modern financial industry, and establishes a securities market denominated and settled in RMB. The General Plan For Building a Guangdong-Macao In-Depth Cooperation Zone in Hengqin, on the one hand, lists the development of modern financial industry as one of the four key industries in the cooperation zone, and on the other hand, defines innovation in cross-border financial management as one of the important contents of Hengqin’s construction of a new system of integration and high-level opening with Macao, in order to enhance the breadth and depth of Macao’s financial market and its financial radiation ability to Portuguese-speaking countries. With the strong support of the country and the SAR, major policies such as preferential tax policy, systems and infrastructure including the Trust Law and the Securities Law, and talent pools are being implemented. In addition, Macao and the cooperation zone have inherent advantages in developing offshore finance and cross-border finance, looking forward to the future of achieving the development of modern financial industry and the interconnection of financial markets in the GBA.

This seminar attracted the participation of undergraduates, master’s and doctoral students of the Faculty of Finance. At the end of the sharing session, the students took this valuable opportunity to actively pose questions on the policies of the GBA, finance and bonds. Dr. Tao Ren answered in detail and said that the vigorous development of Hengqin-Macao requires the joint efforts of the younger generation, and hopes to foresee professional financial talents cultivated by the Faculty will contribute to Macao and the GBA. In the Seminar, students paid attention to the policies of the BGA and Hengqin-Macao, and better understand the advantages of Macao and the In-Depth Cooperation Zone in the BGA, China and even the world, which is helpful to grasp the current development trend of finance. The students also expressed their expectations for the sharing of the next finance seminar.