Hong Kong — Global banks including HSBC and Standard Chartered are ramping up hiring to tap into China’s latest market opening — a new investment link with Hong Kong that could yield almost $500m a year in fees.
“This is a breakthrough for the retail investor to open up new ways of investing on the other side, across the boundary,” said Daniel Chan, head of the Greater Bay area at HSBC, which is hiring 300 to 400 people in Hong Kong for its regional expansion. “We are in full swing preparation.” The sheer size of the powerhouse region of 70-million people with more than $400bn of investable assets is hard to ignore, linking the finance hub of Hong Kong with the technology centre of Shenzhen and the manufacturing and transport clout of Guangzhou.
Both investment routes will operate with a closed-loop currency conversion regime, meaning that proceeds from the redemption of products will be remitted the same way, similar to stock and bond connect programmes. Banks will need to have branches on both sides of the border to join the plan, or partner with another bank. Given travel restrictions due to the pandemic, onshore banks can act as witnesses for new customers making southbound investments, according to the draft plan. There was no mention of a similar option for Hong Kong investors looking to invest in China.