(Yicai Global) May 15 -- China’s State Council, its cabinet, has approved a financial support policy aimed at developing the Guangdong-Hong Kong-Macao Greater Bay Area to open up the local financial market and facilitate cross-border trade and investment in the region.

The policy, which includes 26 specific measures aimed at advancing the area, will strengthen Hong Kong’s offshore yuan and commodities markets and risk management tools, Xinhua News Agency reported yesterday. Chinese authorities revealed plans to focus on high-quality development in the region in February 2019.

The People’s Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission and the State Administration of Foreign Exchange published the policy in unison with hopes of reducing cross-border risks and encouraging innovation in the region’s financial sector.

The plans include allowing overseas banks to set up branches in the Greater Bay Area, which includes Hong Kong, Macao and nine cities in Guangdong province, and run pilot operations for international commercial banks in the Guangdong Free Trade Zone, according to the guidelines.

Many of the specific policies are really innovative, He Fei, a senior researcher at the Bank of Communications’ financial research center, told Yicai Global. Introducing a unified domestic and foreign currency bank account system could have a profound impact on bank account structures, he added.

The guidelines also offer support for Chinese mainland residents in the area looking to buy wealth management products sold by banks in Hong Kong and Macao through banks in the special administrative regions and vice versa.

The new policy provides more cross-border WMP choices for residents on and off the mainland, opening up new channels for yuan flows, Global Times cited Yu Weiwen, president of the Hong Kong Monetary Authority, as saying. This will cement Hong Kong’s role as an offshore yuan hub and an intermediary for capital moving in and out of the mainland, he added.

Editor: James Boynton