The Chinese yuan is planned to flow freely in the entire Greater Bay Area by 2022, according to Carol Lao, deputy director of the financial department of the Monetary Authority of Macau.
On Friday, the Financial Services Bureau (DSF) held a seminar on the opportunities and challenges of Macau special finance. During her presentation, Lao remarked that by 2022, the Chinese yuan should be accepted by the entire Greater Bay Area market, including Hong Kong and Macau.
Currently in Macau, the Chinese yuan, Hong Kong dollar and Macau pataca are accepted in most transactions. In Hong Kong, the Chinese yuan is also widely accepted.
Lao’s information was included in the plan of the Greater Bay Area development. According to this plan, China hopes to expand the scale of the Chinese yuan’s acceptance in more markets, also upgrading the Chinese yuan’s international status.
The specific means of achieving the policy includes banks in the Greater Bay Area, which can carry out lending in the currency. It is not entirely clear what this will mean for currency controls currently in force on the mainland.
The Outline Development Plan for the Greater Bay Area supports consolidating and enhancing Hong Kong’s status as an international financial center, strengthening its status as a global offshore renminbi business hub.
According to the Greater Bay Area plan, the governments of the three regions will progressively expand the scale and scope of the cross-boundary use of the renminbi.
Banking institutions in the Greater Bay Area may launch, in accordance with relevant regulations, cross- boundary renminbi interbank lending, renminbi foreign exchange spot and forward businesses, related renminbi derivative products and cross distribution of wealth management products.
Enterprises in the Greater Bay Area may issue cross-boundary renminbi bonds in accordance with relevant regulations.
Hong Kong’s institutional investors can raise renminbi funds in accordance with the relevant regulations in the Greater Bay Area for investment in the capital markets of Hong Kong, and in participating in the investment of domestic private equity funds and venture capital funds.
Hong Kong should also develop more offshore renminbi, commodity and other risk management tools.
Talking about the development of Macau’s special financial services, Lao said that the specialty of Macau’s system means that a special service or a product, such as financial-leasing, has the potential to exist in several sectors.
“We want to find Macau’s special financial service and products,” said Lao, adding that there were multiple options on the table.
Lao used Luxembourg as an example. She said that Luxembourg decided to transform the country from an industrial country into a financial country by issuing bonds. Luxembourg attracts issuers to list bonds to make profits and profits from the development of other industries’ development.