GD to team up with HK, Macao on finance hub

Guangdong has outlined a plan to build a regional financial center with Hong Kong and Macao in the next five to 10 years, according to a new blueprint showing the rapid development of the provinces modern industrial system.

According to the blueprint, the regional financial center will help upgrade the local industrial structure, focusing on a service economy rather than the current manufacturing base.

The province will increase its annual budget by 1 billion yuan in the coming five years to support the development of the service industry, which could account for about 60 percent of the provinces GDP by 2012.

It also outlined that Guangdong has aimed to develop the financial sector into a pillar industry for the province within the next five years.

"Based on the Closer Economic Partnership Arrangement, a cooperative and coordinative system on the financial sector between Guangdong, Hong Kong and Macao will be set up to help boost financial development in the Pearl River Delta region," said Ding Li, a researcher with the Guangdong Provincial Situation Study and Research Center.

In another development, an official from the Guangdong provincial research center told China Daily yesterday that a plan mapping out the establishment of the regional financial center between Guangdong, Hong Kong and Macao had been submitted to the central government for approval.

"Actually, Guangdong wants to build a financial cooperative and experimental zone with Hong Kong and Macao," the official said, asking not to be named. "Guangdong is seeking more preferential policies from the central government on the financial sector."

For example, Guangdong has long been waiting for the implementation of a "through-train" plan that will allow individual mainland investors to buy stocks directly in Hong Kong. However, Guangdong Party Chief Wang Yang said recently that the "through-train" plan wont be available in the short term, as the financial conditions are insufficient.

"Moreover, Guangdong wants to introduce more financial institutions in Hong Kong and Macao to help their counterparts in the province in their reformation and restructuring process," he said.

According to the official, Guangdong also plans to set up a regional bond market, designed to allow enterprises in Hong Kong, Guangdong and Macao to issue bonds without financial limitations.

To establish the regional financial center, Guangdong plans to first set up a smaller experimental zone between Shenzhen and Hong Kong, he said.

"In the short term, Guangdong hopes to expand its renminbi business in Hong Kong and Shenzhen," he said. "And for the next decade, we want to see to it that financial resources in Guangdong, Hong Kong and Macao can be freely floated."