The People’s Bank of China (PBOC) and the Hong Kong Monetary Authority (HKMA) announced last month the official launch of Payment Connect, a cross-boundary real-time payment system that went live on June 22.

Payment Connect links together China’s Internet Banking Payment System and Hong Kong’s Faster Payment System, supporting real-time cross-border payment services for residents in both markets. It will also enable payment systems of participating institutions to provide faster remittance services in renminbi and Hong Kong dollars. Other supported services include instant remittance services for salary disbursements, and payments of tuition fees and medical bills, among others.

The Payment Connect arrangement will further promote Hong Kong’s position as an international financial center and offshore RMB business hub, according to HKMA Chief Executive Eddie Yue Wai-man. This is indeed a milestone not just in the area of payments but in general in the area of economic integration between the Chinese mainland and the Hong Kong Special Administrative Region. By enabling seamless cross-border digital payments, the initiative strengthens consumer ties and business interoperability. For Hong Kong, this enhances relevance as a financial gateway, while for the mainland, it fuels consumption and cross-border e-commerce.

The arrangement enhances financial inclusion, boosts cross-border tourism, and facilitates greater commercial activity. Small and medium-sized enterprises in both regions stand to benefit from easier transactions and broader customer reach. For consumers, the ability to use familiar e-wallets and payment apps across borders reduces friction and increases spending potential.

And what other places are better than Hong Kong and the mainland when it comes to payment technology? The Chinese mainland is streets ahead in terms of digital payments, and the e-CNY doesn’t disrupt existing ways to pay (with QR codes and face-recognition payments already being widely used on the mainland through Alipay and WeChat Pay).

All this without leaving aside the fact that the special administrative region can play a key role in helping the yuan to internationalize, given its competitive advantages as the world’s largest offshore RMB center. According to the Society for Worldwide Interbank Financial Telecommunication, more than 70 percent of global offshore RMB payments are processed in Hong Kong, meaning it is the world’s largest offshore RMB clearing center. The HKSAR serves as the conduit for China’s onshore financial system to connect with international markets. Its developed regulatory system, English common law heritage, and significant liquidity make it the ideal platform for cross-border use of the digital yuan.

Certainly, Hong Kong’s economic integration is a priority, with the city positioned as a superconnector and as one of the world’s most important financial centers under the “one country, two systems” principle.

Despite some skepticism, Hong Kong’s financial and innovative clout is far from waning, as evidenced by its ascent in international rankings. The Global Financial Centres Index 36 Report ranks Hong Kong third globally and first in the Asia-Pacific, reflecting the city’s considerable advancements.

Hong Kong’s robust legal system continues to attract international investment, underscoring the city’s growth narrative. The HKSAR’s steadfast adherence to the rule of law rivals many Western jurisdictions, enhancing its investment appeal.

Embracing opportunities from the Guangdong-Hong Kong-Macao Greater Bay Area development and actively engaging in the nation’s 14th Five-Year Plan (2021-25), Hong Kong leverages unwavering support from the central government to augment its role, embracing advancements such as the digital yuan and environmental, social and governance initiatives

Hong Kong’s strength as one of the world’s most important financial centers is bolstered not only by its financial significance but also by its strategic location, talent attraction capability, and industrious, educated populace. The city’s unique role as part of China yet also an international city positions it as an essential gateway for foreign businesses looking to tap into the vast mainland market.

Hong Kong’s asset-and-wealth management prowess offers an offshore “haven” for the mainland’s affluent people, while its stock and bond markets provide fundraising avenues for mainland enterprises requiring foreign exchange for expansion. However, the essence of Hong Kong’s success as a superconnector is inextricably linked to the mainland’s fortunes.

Embracing opportunities from the Guangdong-Hong Kong-Macao Greater Bay Area development and actively engaging in the nation’s 14th Five-Year Plan (2021-25), Hong Kong leverages unwavering support from the central government to augment its role, embracing advancements such as the digital yuan and environmental, social and governance initiatives.

Looking beyond the Greater Bay Area, Hong Kong’s future is bright with prospects like fintech growth, potential Regional Comprehensive Economic Partnership membership, and the various Connect arrangements.

In conclusion, the national two sessions are instrumental in fostering economic integration between the mainland and Hong Kong. The city’s financial acumen and its burgeoning role as a superconnector — amplified by integration with the mainland — cement the city’s status as a pivotal financial hub and bridge to mainland markets and opportunities.

While the HKSAR profits from being the “gateway” to the Chinese mainland, this role will admittedly diminish as the mainland further opens its economy and financial system to outside players. Thus it would be wise for Hong Kong to diversify its economy as much as possible. It must therefore grab hold of any opportunity to do so. And while doing so, Hong Kong should focus further on its economic integration with the mainland.

This move also aligns with efforts to promote the Greater Bay Area as a unified economic zone. The HKSAR is being positioned not just as a bridge, but as an increasingly internal node within China’s financial web. The Payment Connect is a manifestation of that transition.

The author is a fintech adviser, a researcher and a former business analyst for a Hong Kong publicly listed company.

The views do not necessarily reflect those of China Daily.