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Hong Kong to enhance cross-border transfers for residents who work, live in mainland China
- Hong Kong’s monetary authority will work with the Chinese central bank to enhance cross-border remittance services to make it easier for Hongkongers who work or retire on the mainland
Hong Kong’s monetary authority plans to sign an agreement with the Chinese central bank to find ways to enhance cross-border remittance services to make it easier for Hongkongers who work or retire on the mainland.
The planned agreement with the People’s Bank of China (PBOC) is expected to discuss ways to make it easier to transfer more money across the border, said Colin Pou Hak-wan, the executive director of the Hong Kong Monetary Authority (HKMA).
“At present, one can only remit up to 80,000 yuan (US$11,015) per day from Hong Kong to the mainland, so some people need to split their remittance over many days to transfer enough money to meet their daily expenses or healthcare needs,” Pou said. “These are some of the pain points faced by some Hongkongers who move to work or retire on the mainland.”
![Colin Pou Hak-wan, Executive Director (Financial Infrastructure) of the Hong Kong Monetary Authority (centre) during the launch of the 2018 New Series Hong Kong Banknotes on 11 December 2018. Photo: Xiaomei Chen](https://cdn.i-scmp.com/sites/default/files/d8/images/canvas/2024/06/28/f2e5745c-1dfb-4f7f-ba12-8162c89c6471_f169b596.jpg)
“There were about 200 cases in the past few months of cross-border payments by Hongkongers for buying property in the Greater Bay Area,” Chan said. “The successful experience led us to move forward to cover other types of large remittance to support their living costs, or healthcare, on the mainland.”
The relaxation of cross-border payments for buying homes in the Greater Bay Area was one of the six policies announced by the PBOC in January to support Hong Kong as China’s global financial hub.
Other policy enhancements include the expansion of two cross-border trading schemes – the Bond Connect and the Wealth Management Connect mechanisms. It also includes two pilot schemes: one for Hongkongers to open e-CNY wallets in May and the other for banks in Hong Kong and on the mainland to share the credit information of companies in Shenzhen via credit agencies.
“The six policies have made encouraging progress over the past few months, which enhanced cross-border payments between Hong Kong and the mainland,” Chan said. “HKMA and PBOC will continue to enhance the cross-border transactions to address the needs of the individuals and companies.”
The pilot scheme for credit information sharing has been successfully implemented, allowing small and medium enterprises (SMEs) in Hong Kong and the mainland to get bank loans more easily. The HKMA announced the full implementation of the scheme on Friday.
Alan Au Yuk-lun, executive director of HKMA, said the credit-sharing information is most useful for SMEs that have operations in both Hong Kong and the mainland.
Under the scheme, mainland SMEs that want to expand in Hong Kong can get a bank loan from a Hong Kong lender, which can obtain their credit information on the mainland via a credit agency. Likewise, Hong Kong SMEs that want to expand in the bay area can get bank loans from mainland banks, which can obtain their credit report.
“There is an increasing number of SMEs that have cross-boundary settings, so the demand for cross-border credit information is also on the rise,” Au said.
HSBC, Hong Kong’s biggest lender, has been involved in the pilot scheme. Frank Fang, head of commercial banking in Hong Kong and Macau at HSBC, said the scheme helps banks evaluate companies’ creditworthiness and grant loans.
“As a dominant gateway between the mainland and the rest of the world, Hong Kong plays to its strength as a leading financial hub to support burgeoning cross-boundary business activities,” Fang said in a statement. “With the growing demand for seamless cross-boundary financing, we will continue to enhance our solutions for businesses and foster their growth in Hong Kong and beyond.”
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