The business sector in Hong Kong has been waiting for more details of the GBA master plan since its initial announcement in February. But there hasn’t been much major progress, particularly in the banking sector. So some of the players are taking it on themselves to pitch their ideas.
A group of the Hong Kong units of some of the leading mainland banks will visit Guangdong in September in a delegation led by Norman Chan, the current head of the Hong Kong Monetary Authority, and Chinese Banking Association of Hong Kong chairman Gao Yingxin.
Their itinerary will include meetings with regulatory bodies and related government departments, with discussions expected to centre on the issuance of cross-border mortgages and the use of e-wallets.
Hongkongers are major buyers of mainland properties. According to a recent study, at least 511,000 residents hold more than HK$10 million each in assets. About 60% of them own a property in mainland China, in addition to homes in Hong Kong and other overseas markets.
All of Hong Kong’s banks want to finance more of their customers as they invest further in Chinese property. However, the mainland authorities need to grant permissions for a property across the border to be used as collateral for mortgage loans. Some GBA cities allow such practice and others don’t. Industry participants want to get to a standard policy as a result of their September visit.
Bankers also want more of Hong Kong’s e-wallets to be usable across the border. Individual service providers, such as BOC Pay, Wechat Pay and Alipay say that their e-wallets can already be used in GBA cities for payments and money transfers – saving customers the hassle of opening new accounts. Others are still primarily for local use, however.
For Hong Kong’s retail banking community, broadening the acceptance of locally-based digital payment is expected to generate additional revenue from customer spending across the border. There will also be income from foreign exchange transactions as customers settle bills, buy meals, book train tickets and hotel rooms, and hail taxis on the mainland, paying with the Hong Kong dollars in their bank accounts.
With more GBA cities offering tax incentives and other subsidies to encourage Hong Kong workers to take jobs in the mainland, in particular in the IT sector, the e-wallets will also be helpful for people who travel frequently between Hong Kong and other cities in the region.
Instead of sitting and waiting for the authorities to come up with beneficial measures, other industries should take their lead from the banking sector and present their ideas to get the most out of the initiative.