PBC launches new cross-border investment plan

The People's Bank of China (PBC), the country's central bank, will conduct a trial of a cross-border investment service for residents of the Guangdong-Hong Kong-Macao Greater Bay Area to facilitate investment among the Chinese mainland, the Hong Kong Special Administrative Region (HKSAR) and the Macao Special Administrative Region.

The service can be divided into the “Southbound Linkage” and the “Northbound Linkage”.

The “Southbound Linkage” will allow the mainlanders residing in the Greater Bay Area to open accounts and invest in financial products that are sold by banks in Hong Kong and Macao, while the “Northbound Linkage” will allow residents in Hong Kong and Macao to open bank accounts and make financial investments via mainland-based banks within the Greater Bay Area.

The cross-border investment services will adhere to relevant laws and regulations applied in Hong Kong, Macao and the mainland, while adhering to international practices, said the PBC.

Industry insiders said the move is the latest effort by the central government to consolidate Hong Kong's status as an international financial center, adding that more measures are expected soon. The move also comes ahead of the expected adoption of the national security law for HKSAR.

“The new policy could facilitate residents from the Chinese mainland to invest in Hong Kong's wealth management products, and it would no doubt be a benefit to the HKSAR's financial industry development,” a close follower of Hong Kong economic issues surnamed Li told the Global Times on Monday.

The Hong Kong Monetary Authority (HKMA) welcomed the move. “The two-way cross-border investment service is another breakthrough in promoting Hong Kong's offshore yuan business and deepening the integration of the Greater Bay Area,” Eddie Yue, chief executive of the HKMA, said in a statement on Monday.