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Hong Kong, Guangdong Strengthen Ties Within CEPA

by Mary Swire, Tax-News.com, Hong Kong

20 August 2012


Hong Kong’s Permanent Secretary for Financial Services and the Treasury (Financial Services), Au King-chi, has emphasized that boosting financial co-operation between Mainland China and Hong Kong has long been a major policy goal for the government, with the co-operation and integration between Guangdong and Hong Kong as the main driving force behind it.

Au says that, to implement the liberalization measures of the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) and to make an important step forward so as to enhance financial co-operation between Guangdong and Hong Kong, the establishment o the first joint venture securities investment advisory company - Guangzhou GuangZheng Hang Seng Securities Investment Advisory Company Limited (GZHS) - marks a milestone for co-operation between the securities sectors in the two places.

"It heralds a good start and is greatly conducive to the innovation and internationalization of the securities business in the two places,” she added. “I sincerely thank the Guangdong Provincial Government and the China Securities Regulatory Commission for their support to realise this project.”

Guangdong province, the nearest to Hong Kong and of which, historically, the latter was a part, is the most populous province in China. Its provincial capital Guangzhou and economic centre Shenzhen are amongst the most important cities in the country.

GZHS, a joint venture located in Guangzhou, is owned 67% by GuangZheng Securities and 33% by Hang Seng Securities Limited, the securities arm of Hong Kong’s Hang Seng Bank. Its two shareholders applied last year to set up the first joint venture securities investment advisory company in Guangdong province under the CEPA.

The joint venture will engage in compiling analysis reports on the valuation of securities and securities-related products, as well as conducting market research. Timely reports will be disseminated to Mainland institutional investors and individual investors in Guangdong province.

Guangzhou Securities is a member of Yue Xiu Group, which is the largest state-owned company in Guangzhou in terms of total assets and is engaged in three core businesses - real estate, transport infrastructure, and finance and securities. At the end of 2011, it had total assets of RMB128.4bn (USD20.2bn) and total revenue of over RMB10bn. During the period of China’s 12th Five-Year Plan (2011-15), the Yue Xiu Group plans to develop its financial business substantially.

"Hang Seng,” Au continued, “is a well-known brand to, and supported by, Hong Kong people. It is also a financial institution of international standard and has lots of experience in providing financial information to private banking customers. Guangzhou Securities was one of the earliest securities companies in China. With its wide scope of business, Guangzhou Securities leverages Guangdong's business advantages and expands its national market opportunities.”

"The joint venture company takes the lead to demonstrate the benefits,” she concluded. “I trust there will be more such collaboration in future to help foster the development of securities, insurance, accounting, bonds, fund management, banks and loans on both sides. I also trust the related government departments and financial regulators of both sides will strive to promote their financial co-operation, to encourage more Guangdong enterprises to become listed in Hong Kong and issue Renminbi bonds, and to support more Hong Kong financial institutions to enter the Mainland market and provide high-quality services to investors.”

TAGS: investment | business | foreign direct investment (FDI) | financial services | investment funds | equity investment | China | offshore | Hong Kong | services

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