Hong Kong: Hong Kong's government is exploring ways to strengthen and broaden its financial ties with mainland China by including insurance products for stocks, bonds and wealth management tools in various cross-border investment platforms.
According to Christopher Hui Ching-yu, Secretary of Financial Services and Treasury, the action is planned for the following phase of development following the current initiative to set up after-sales service centers in the near future.
He said at the monthly Legislative Council Financial Affairs Panel meeting on Monday that it could be integrated as a part of the Wealth Management Connect scheme launched in 2021 or as a standalone Insurance Connect scheme so that within 11 cities To allow cross-border sales of policies. Gulf region. There has been no election.
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“We are examining two options to determine which will be more beneficial,” he said. The legislator said the option would be based on regulatory discussions with mainland sugar regulators, including those related to the timeline.
Due to strong demand from insurers, the city government is eager to move forward with the long-awaited idea of creating these service centers, such as those in Nansha and Qianhai, Chief Executive John Lee Ka-chiu said in his policy address in October. I said. Residents of nine mainland Chinese cities located in the Bay Area can count on them.
At its peak in 2016, mainland Chinese consumers purchased insurance policies from Hong Kong-based insurance companies for HK$72.68 billion (US$9.26 billion), or 39% of the city's premium. This fell to HK$688 million, or 0.4% of the total, in 2021, according to official figures, as border closures reduced mainland arrivals by 98%.
Wealth Management Connect, which celebrated its first birthday on 19 October, enables commercial lenders in Hong Kong and Macau to market investment fund services to citizens of the Gulf region through their partners in mainland banking.
Chan Kin-por, a lawmaker with an insurance background and a member of the executive council, said the city's cabinet would like to add insurance products from these lenders to the wealth management menu.
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The first connect scheme was launched in 2014, linking the stock exchanges between Hong Kong and Shanghai, before adding the Shenzhen leg two years later. Bond Connect allowed mainland funds to start buying bonds in Hong Kong in 2021 and allowed foreign investors to buy yuan bonds in 2017.
ETF Connect is the most recent international event to join the mix in July to commemorate the transfer of ownership of the city 25 years ago.
According to Hui, the volume of international investors trading in mainland-listed ETFs more than doubled in September to 42 million yuan (US$5.8 million) per day. Over the same time period, the amount of Hong Kong-listed ETFs traded by mainland investors tripled to HK$680 million per day.
Hui claimed the government was considering requests to revive the 2003-era capital investment entry scheme. Wealthy foreigners and their families were given the opportunity to obtain a Hong Kong identity card by investing HK$10 million in approved stocks, bonds, insurance and funds.
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Prior to its suspension in 2015, the scheme attracted HK$206 billion in investment, in part as a result of complaints that it raised real estate prices. According to executive council coordinator Regina Ip, the plan could be reformed to boost the faltering economy.
According to him, the main concern with this scheme is to dispel property market speculation and avoid negatively affecting the quality of life of the local people.