(Yicai Global) Sept. 3 -- The Guangzhou city government's executive meeting yesterday passed an action plan that will fund construction of the Guangdong-Hong Kong-Macau Greater Bay Area and establish the Guangzhou Futures Exchange and supporting banks in Guangzhou to issue cross-border loans to institutions or projects in the Hong Kong and Macau Special Administrative Regions.

The scheme's 66 measures encompass developing major projects and platforms, facilitating cross-border trade, investment and financing in the Greater Bay Area, opening the financial sector wider, and diversifying financing channels between Guangzhou and its two neighboring SARs.

The southern Chinese megacity is cooperating with responsible ministries and commissions to excel realize the Guangzhou Futures Exchange and the research and reserve of futures trading products.

The blueprint also proposes the formation of the Guangdong-Hong Kong-Macao Greater Bay Area International Commercial Bank in the China Guangdong Pilot Free Trade Zone Nansha Area of Guangzhou, supporting eligible insurance institutions from the two SARs to set up operating institutions in the district and advancing the inception of the Hong Kong-Macau Insurance Service Center there.

The draft expressly offers a helping hand for Guangzhou banks' extension of cross-border loans to institutions or projects in Hong Kong and Macau. It also aids the Guangzhou branches of banks in the SARs to offer loans for the construction of the GBA, helps Guangzhou with cross-border property mortgaging and registration, trials Hong Kong and Macau residents’ mortgages of houses bought for personal use in the mainland GBA to SAR banks, and smooths the way for these residents to buy such homes.

The formulation also supports the pooling of Chinese yuan-denominated overseas investment and loan funds, props up mainland non-bank financial institutions' conduct of cross-border business with the SARs, and pilots cross-border investments by private equity investment funds.

Guangzhou will also assay mainland mobile payments for visitors from overseas countries or regions and foreign exchange carbon emission trading in the GBA mainland in foreign exchange or yuan, per the scheme.

The People's Bank of China issued a circular on financial support to develop the GBA in May that seeks to ease cross-border trade, investment and financing in the area, expand opening of its financial sector, spur connectivity between the financial market and its infrastructure, and improve the level of financial services innovation in there.

Editor: Ben Armour