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Hong Kong’s Central Bank Inks FinTech Pact with Shenzen in China

Last Updated March 4, 2021 4:57 PM
Samburaj Das
Last Updated March 4, 2021 4:57 PM

The Hong Kong Monetary Authority (HKMA), the defacto central bank, is co-operating with the neighboring city of Shenzhen in China over developments in financial technologies or FinTech.

Hong Kong is looking to gain expertise from the world’s largest FinTech market in China, a country which sees some 500 million people, over 40% of its population, adopt FinTech payment methods.

On Friday, HKMA’s chief executive, Norman Chan, visited the Office of Financial Development Service, an arm under the People’s Government of Shenzen Municipality (OFDS), to ‘keep abreast’ of new developments and applications of financial technology solutions in Shenzhen. Further, the two authorities also exchanged ideas for cooperation between banks and financial institutions in the two cities.

Given the geographical proximity between the two cities, the bilateral co-operation is certain to promote FinTech activity and adoption in two of the most prosperous cities in the region. Shenzhen is among the largest and the wealthiest cities in China, one that links Hong Kong to the Mainland.

Chain pointed to significant benefits that are to come from the co-operation, with the strengths of the two cities aiding toward a mutually beneficial ecosystem. Hong Kong is among the world’s leading centers for international finance and trade while Shenzhen is a major hub for innovation, hosting a number of technology companies in the city.

He Xiaojun, director-general of the OFDS stated:

As one of the three major financial centres on the Mainland, Shenzhen has an innovative and vibrant financial sector and a well-developed high-tech industry. It is a hub not only for many start-ups and research talents, but also many leading global technology companies

Initiatives from the co-operation agreement includes the OFDS participating in the 2017 FinTech summit in Hong Kong as well as co-organizing a ‘major fintech competition’ for new fintech firms to showcase new products and concepts.

The Shenzhen government will also help Hong Kong’s Fintech firms gain a presence in the city, a move that will be reciprocated by the HKMA for Shenzhen-based FinTech firms in Hong Kong.

Notably, both authorities will also establish a program for internships for Hong Kong students in major FinTech firms in Shenzhen.

Xiaojun added:

Co-operation between the two cities will create mutual benefits and strong synergies, adding new impetus to the Bay Area. It will also signify an important step for the Bay Area to develop into an international fintech centre.

In playing catch-up to China, an advisory body to Hong Kong’s government published a research report urging Hong Kong to recognize digital currencies and invest in blockchain technology.

“Hong Kong needs in particular to capitalize on the possible issuance of digital RMB overseas by the Mainland Chinese authorities in the context of RMB internationalization” the report stated, pointing to China’s efforts to digitize its currency. This would help Hong Kong become the ‘digital RMB payments rail in and out of Mainland China,” the report added.

Featured image of Hong Kong bridge from Shutterstock.