People gather to watch the sunset as they stand on a viewing platform in Tamar Park overlooking Victoria Harbour and the Kowloon skyline in Hong Kong on May 5, 2020. (ANTHONY WALLACE / AFP)
The central government’s long-awaited plan to allow investments for private wealth between the Hong Kong Special Administrative Region and the increasingly affluent southern region is set to kick off in the next few days.
A link allowing mainland investors to buy bonds in Hong Kong will also start in the next few days, said Pan Gongsheng, deputy governor of the People’s Bank of China and head of the State Administration of Foreign Exchange
The start was announced on Thursday at a briefing in Beijing by Pan Gongsheng, deputy governor of the People’s Bank of China and head of the State Administration of Foreign Exchange. A link allowing mainland investors to buy bonds in Hong Kong will also start in the next few days, he said.
As outlined earlier, the Wealth Management Connect will apply to residents of the Hong Kong and Macao SARs, as well as major cities in Guangdong province on the mainland. Investments are being capped at 150 billion yuan (US$23.2 billion) in each direction with an individual quota of 1 million yuan.
READ MORE: Mainland wealth link with HK to be capped at US$23b each way
Banks including HSBC Holdings Plc, Standard Chartered Plc and Citigroup Inc. have been beefing up their presence in anticipation of the plan, one of the building blocks in integrating the Guangdong-Hong Kong-Macao Greater Bay Area, a region of 70 million people. The program could yield almost US$500 million a year in fees for banks, according to Bloomberg Intelligence estimates.
The link will open a northbound channel for Hong Kong and Macao residents to invest in onshore financial products and a southbound channel for eligible mainland residents to invest offshore, both with a closed-loop currency conversion regime.
Mainland residents will need at least 2 years investment experience and at least 1 million yuan in net household financial assets in the most recent three months to be qualified.
The plan was announced without details in June last year.
READ MORE: HK finance chief: Cross-border wealth flows bring opportunities