Opportunities & challenges for Macao’s modern financial sector from Hengqin In-depth Cooperation Zone’s 30 rules
Commentary by Ivan Cheung Ming Fai*
Opportunities
An “Opinions” document on the “Financial Support for the Development of the Guangdong-Macao In-depth Cooperation Zone in Hengqin” (“Opinions Document”) has recently been adopted. The document reflects the aim for the Guangdong-Macao In-depth Cooperation Zone in Hengqin to further open up to Macao’s financial industry and create a favourable financial environment for Macao residents, facilitate cross-border transactions and RMB settlement. The document aims to promote the interconnection of Macao’s financial market and financial infrastructure, develop Macao’s appropriate economic diversification and a diversified modern financial industry in the zone.
The contents of the document encourage the establishment of various institutions such as securities companies, fund companies, reinsurance companies, and subsidiaries for banks’ wealth
management services, apart from supporting qualified corporate financial institutions to establish branches and subsidiaries in the zone, aiming to create diversified, comprehensive and more consummate financial services for the zone in the future.
Furthermore, the document also promotes the aim of “strengthening the insurance protection of residents in the zone, supporting insurance institutions from the mainland and Macao to jointly research and develop cross-border commercial medical care, pension and other special insurance products for the zone’s residents, apart from supporting the development of the cross-border motor insurance business in the zone, thereby supporting the zone to participate in the development of the insurance service centre in the Greater Bay Area.”
The document also encourages the insurance institutions from the two places (Macao and Guangdong) to collaborate in the creation of innovative insurance products, and the ongoing implementation of the “Macao Vehicles Going North” measures, with the objective of creating more favourable employment and development conditions for future insurance business and human capital exchanges.
In addition, the document also expressly states that the financial sector in the zone will lead to Macao’s high-level opening-up, support Macao’s innovative financial industry development in the zone, as well as expand the opening-up of Macao’s financial industry in the zone. Under the framework of the Mainland and Hong Kong/Macao Closer Economic Partnership Arrangement (CEPA), the zone’s entry requirements for Macao’s banking institutions and insurance institutions will be lowered. This shall create important business opportunities and also the opportunity to set up subsidiaries by Macao’s insurance institutions, providing a more established insurance services platform for clients. Utilising Macao’s present advantages, the aim is to strengthen China’s and Portuguese-speaking countries’ influence on the insurance services platform by playing an important role as a “window”, thereby creating business opportunities in the long-run.
Also aiming to strengthen the formation of a talents’ team, the zone has rolled out special supportive policies on high-quality financial talents, supporting the import and training of high-quality talents for the country’s advanced financial industry, thereby furthering the exchanges and cooperation between the zone and Macao in nurturing talents, as well as encouraging the joint development between the zone and Macao in the area of financial talent training.
The document expressly underlines the importance of talent development of Macao’s modern financial sector, which acknowledges the shortage of financial talents, because of which it is necessary to “import” and “provide training” for those talents. This helps create favourable job opportunities and a working environment for the zone’s future financial industry.
Challenges
The zone’s 30 rules have created a favourable platform for the opening-up of Macao’s financial services, and also for strengthening the interconnection with Macao’s financial industry by creating a financial environment for Macao residents to live and work across the border.
However, the release of the document will bring different challenges to Macao’s financial industry. By lowering the entry requirement for Macao’s financial institutions, it will definitely create a valuable business opportunity for both Macao’s banking and insurance industries.
However, it is still an important concern and poses huge challenges concerning different factors, such as the requirement for capital and investment thresholds under the Mainland and Macao Closer Economic Partnership Arrangement (CEPA) framework, the design of financial insurance products for local residents’ future needs and the different legal requirements in both Hengqin and Macao.
In the meantime, the flow of financial talents between both places will also be an important national strategy. How to attract high-end financial professionals and how to cultivate or train financial talents will also be an important issue in the future.
Therefore, the implementation of a talent importation arrangement of the Macao Special Administrative Region should be launched as soon as possible and the government, businesspeople and experts should work together to improve the relevant measures in order to bring them in line with the future strategy of the Macao government and promote the appropriate diversification goals of Macao’s economy. By creating a professional service platform and cultivating various types of talents for both Macao and the zone, we can probably integrate into the national policies and engaging the world.
*President of the Macau Insurance Industry Professionals Association (MIIPA)
** Minor edits by The Macau Post Daily
Undated file photo of Ivan Cheong Ming Fai, president of the Macau Insurance Industry Professionals Association (MIIPA) – Photo Courtesy of MIIPA
