27 October 2016
Visitors look at an aquarium inside the Chimelong Ocean Kingdom in Hengqin. The district wants to be more than a tourism and leisure center. Photo: AFP
Visitors look at an aquarium inside the Chimelong Ocean Kingdom in Hengqin. The district wants to be more than a tourism and leisure center. Photo: AFP

Hengqin steps up bid to become financial center

For most Hong Kong people, the district of Hengqin in Zhuhai is best known for hosting Chimelong, the world’s largest marine theme park, on its southern tip. It is heavily promoting the pleasures of the park in the Hong Kong press and on social media.

But Hengqin has ambitions in addition to being a tourism and leisure center and home to the spacious new campus of the University of Macau.

It wants to be an international financial center, exploiting its new status as a free trade zone and opportunities from the internationalization of the renminbi — and it wants the participation of Hong Kong people and companies.

In its northeast is the Shizimen Central Business District, with a total investment of 36 billion yuan (US$5.78 billion). Office blocks have been built and China’s major banks have taken space in them.

In March 2014 alone, 62 financial institutions established a presence in Hengqin, then 50 in April. In 2009, the district had one single bank. These institutions include banks, securities firms, insurance companies and money exchangers.

As of the end of 2014, 35 financial institutions from Macau and Hong Kong had set up there, managing a total of 850 billion yuan in funds.

Under preferential policies approved by the State Council in July 2011, financial institutions in Hengqin can set up offshore financial currency and trust funds and do currency conversions for individuals.

Hong Kong and Guangdong hope that, in Hengqin, their financial institutions will be able to do the same cross-border lending and cash pooling that is allowed in the Shanghai FTZ.

The arrangement has helped facilitate yuan circulation and usage in the offshore market and attract more foreign companies to use the Chinese currency – a further step toward its internationalization.

On May 21, Hengqin opened its first trading center, for commodities and precious metals. It aims to be the biggest such center in Guangdong province.

At the opening ceremony, the center signed agreements with eight banks, including Bank of China, ICBC, Agricultural Bank, Construction Bank and Bank of Communications. It also signed a strategic partnership agreement with Secoo, one of China’s largest online providers of luxury goods.

The market is open to state and private companies with a minimum capital of 100 million yuan and will, in the initial stage, trade precious metals, non-ferrous metals, rare earths, mahogany and energy and petrochemical products.

General manager Huang Shikun said the center will offer clients standard contracts with high value, ample opportunities for financing and collateral and fast supply of information.

According to official figures, at the end of April, 889 financial institutions of different kinds had established a presence in Hengqin, with a registered capital of 138.4 billion yuan.

In 2014, the assets of wealth management companies there reached 840 billion yuan. During the year, taxes paid by financial institutions were 1.37 billion yuan, accounting for 21.1 percent of the total for the district and 13.2 percent of its GDP.

Hong Kong is an important part of the equation. Great Hengqin Investment Company issued a 1.5 billion yuan bond in Hong Kong and several other local companies plan to do the same, including HuaFa, Zhuhai’s biggest property developer.

This year the district intends to issue a total of 400 million yuan of debt to finance different infrastructure projects.

At the end of 2014, the district’s financial institutions held 47 billion yuan in cross-border deposits, many of them from Hong Kong depositors.

Hong Kong and Macau residents are also important borrowers in the Hengqin property market. They have borrowed the equivalent of US$100 million to buy property there. They can use the multi-currency Yin Lian (銀聯) bank cards to make payments.

According to the latest figures from the Hengqin New Area Management Committee, 601 Hong Kong and Macau firms have invested in the district, of which 422 are from Macau and 179 from Hong Kong. The total investment of the Macau firms is more than 200 billion yuan.

On May 27, Niu Jing, who heads the management committee, told 500 business leaders from 250 Zhuhai-based companies that 9,145 companies had established a presence in Hengqing, with a registered capital of 489.6 billion yuan.

In the past, many people have regarded Hengqin as primarily a property play, like the other SEZs in China in their early years. Now the district is trying to establish its credentials for other reasons.

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Hong Kong-based journalist and author. He had worked as a correspondent for the South China Morning Post in Beijing and Shanghai.

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