(Yicai Global) Jan. 10 -- Southern China's Shenzhen will collaborate with the Hong Kong Special Administrative Region on digital yuan payments.

The city in Guangdong province and Hong Kong will jointly build a demonstration area for cross-border payments in the central bank-backed digital currency, the financial bureau of Shenzhen said in a document valid till 2025 issued on its website yesterday. Moreover, the municipality and Hong Kong will strengthen their partnership in wealth management and deepen the opening up in the related market.

The document included other predictions. The scale of wealth managed by Shenzhen’s brokerages and multiple other types of financial institutions is to reach more than CNY30 trillion (USD4.42 trillion) by 2025. The number of registered qualified foreign limited partnerships, qualified domestic investment enterprises, and wholly foreign-owned enterprise private fund managers in the city will be at least 300 by then.

Wealth management institutions in Shenzhen and Hong Kong are encouraged to take part in multiple kinds of interconnectivity mechanisms of the financial market, including the Shenzhen-Hong Kong Stock Connect and the Bond Connect, to increase the offshore use of renminbi.

Shenzhen and Hong Kong should develop more yuan-denominated financial products and support the establishment of investment platforms in Hong Kong and the corresponding applications for asset management licenses in Hong Kong, so as to spur the internationalization of yuan-denominated funds.

The bureau will support the construction of a bond platform in the Guangdong-Hong Kong-Macao Greater Bay Area. It will facilitate pilots of cross-border bond products, building of an insurance service center in the area, and explore the cross-border application of insurance funds in Shenzhen, Hong Kong, and Macao.

The bureau will also assist Hong Kong-based financial organizations to set up wholly foreign-owned wealth management firms in the mainland city. It will support qualified Hong Kong limited partnership fund managers to apply to set up investment entities for QFLPs and QDIEs in Shenzhen to carry out equity investments and to help Shenzhen-based wealth management institutions go overseas.

Editor: Emmi Laine, Xiao Yi