Amid the wave of Chinese enterprises “going global”, cross-border finance has taken on growing significance, particularly within the Guangdong-Hong Kong-Macao Greater Bay Area, where Hong Kong is well-positioned to capitalize on its unparalleled financial strengths to serve as a key pillar, financial officials and business leaders said.
They made their remarks during the 20th Shenzhen International Finance Expo, which opened in Shenzhen on Wednesday and runs through Friday.
Ginger Cheng, CEO of DBS Bank (China) Ltd, said that ongoing renminbi internationalization across Asia has created massive development space for cross-border finance and the Greater Bay Area, with a population of 88 million and an economic output exceeding 15 trillion yuan ($2.2 trillion), stands out as a prime hub for such services.
According to official statistics, Shenzhen’s cross-border renminbi transactions hit 5.83 trillion yuan last year, ranking third among Chinese mainland cities.
Home to global industry leaders Huawei, BYD, SF Express and DJI, Cheng said that Shenzhen has seen strong demand for cross-border fund management, risk hedging and global supply chain finance, laying a solid foundation for cross-border financial innovation.
“Financial institutions should do more than simply offer loans to assist enterprises in going global. They need to integrate technological infrastructure, capital and an ecosystem to accompany companies from startup to global expansion,” she added.
They should also help boost industrial cooperation and resolve major challenges in market entry, cross-border financing, compliance and local deployment for outbound businesses, Cheng said.
Richard Li, head of Greater Bay Area at HSBC China, said Chinese enterprises have entered the 3.0 era of global expansion, with their overseas development models witnessing major upgrades.
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While the previous two phases focused on product exports and cross-border mergers and acquisitions, he added that the 3.0 version sees Chinese firms export their strengths in research and development, production, technical standards and operational management to overseas markets.
“Such transformation mirrors the steady elevation of China’s industrial sector in the global value chain,” Li said.
Governments and regulators need to provide proper guidance to ensure enterprises go global in an orderly manner, while banks and other financial institutions should offer solid support to help them mitigate risks and uncertainties in their global operations, he added.
Secretary for Financial Services and the Treasury Christopher Hui Ching-yu highlighted the strategic value of Hong Kong-Shenzhen cooperation, which he described as a model of “complementary strengths and twin cities shining in tandem”.
Leveraging its well-established international financial network, professional financial services, free capital market and extensive cross-border financial expertise, Hong Kong has forged in-depth integration with Shenzhen’s strengths in technological innovation, he said.
This synergy has created “a brand-new development landscape and unlocked boundless potential between the two cities”, Hui added, noting that Hong Kong’s capital market has become the “cradle” for the growth of Shenzhen’s technology enterprises, with 160 Shenzhen-based companies listed in the special administrative region, including Tencent Holdings, Ping An Insurance and BYD.
The Hong Kong SAR government also established the GoGlobal Task Force last year, a platform designed to help mainland companies go global. The initiative had assisted about 310 enterprises in starting or expanding their businesses in Hong Kong as of early May, bringing in over HK$26 billion ($3.3 billion) in direct investment in the first year of operation, he said.
Chen Ziyu contributed to this story.
