Thread by @liqian_ren

1/ 11 A thread on a piloting program #China Wealth Management Connect(跨境理财通). Central to understand: Blackrock $1b onshore fund subscription as first WhollyOwnedForeign Enterprise (WFOE), Qianhai/Hengqin Plans to spur integration HK-GuangDong-Macau Bay area.

2/11 Analogy: Think Stock/bond Connect trading program but for asset management industry. Secondary effect also plays to the ambition of RMB internationalization. Again, Dollar’s reserve currency status could only be lost by future US obsession with #MMT.

3/11 Those who recently started paying attention to China’s regulatory/policy framework, this is very typical how policies got implemented: start small to tread water and if it went out of control, shut it down completely, then start testing again.

4/11 Essentially residents in 9 cities who qualify from GuangDong province could start buying low/medium non-complex wealth management products approved by regulators in HK/Macau. HK/Macau residents can start buying mainland onshore financial products.

5/11 Qualifications for mainland investors, think #FINRA accredited investors idea: 5 years of tax records. Either 2 yrs invt experience + family investment assets >=Yuan1mil, or family investment assets>=Yuan 2mil ($310k). Can not group money together from people to qualify.

6/11 No qualification requirements for HK/Macau investors who buy onshore financial products. The aggregate quota for the scheme is 150 billion yuan with an individual investor MAX quota of 1 million yuan for investment.

7/11 HSBC, BOC-HK, Hang Seng, Citibank HK all have plans to offer 100+ products covering in funds, bonds, deposits and foreign exchange services. Standard Chartered plans center in Guangzhou with more than 1600 staff.

8/11 It took two years from planning to piloting. Four official notices were given from the beginning in 2019 to current date. So it is not necessarily completely out of blue.

9/11 This program will be running parallel to the WOFE asset management licenses given to foreign asset management firms. All these point to continued effort of financial integration with HK, Macau and offering tests on how to gingerly allow mainland investors to invest overseas.

10/11 There has been significant assets moving from HK to Singapore last 2 years. Shanghai and Singapore both vie to be THE financial center in Fast East. However, this pilot suggests HK still retains the eminent role with its common law legal system and proximity to mainland.

11/11 The Chinese and English news links below for your reference. finance.sina.com.cn/stock/roll/202… (in Chinese)
thestandard.com.hk/section-news/s…

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