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Ivan Cheung
President of the Board of Directors
Macau Insurance Industry Professionals Association
Opportunities
The Guangdong-Macau In-Depth Cooperation Zone in Hengqin is set to open up to Macau’s financial industry, creating a favourable financial environment for SAR residents, facilitating cross-border transactions, and promoting RMB settlement. The recently adopted “Opinions on Financial Support for the Development of the Guangdong-Macau In-Depth Cooperation Zone in Hengqin” (Opinions Document) reflects this commitment and aims to develop a modern and diversified financial industry in the Cooperation Zone.
The Opinions Document encourages the establishment of various financial institutions, such as securities, fund and reinsurance companies, and wealth management subsidiaries of banks. Qualified corporate financial institutions are also encouraged to establish branches and subsidiaries in the Cooperation Zone, in order to provide diversified, comprehensive and consummate financial services in the future.
In addition, the Opinions document emphasizes “strengthening the insurance protection of residents in the Cooperation Zone, supporting insurance institutions of Mainland and Macau to jointly research and develop cross-border commercial medical care, pensions, and other special insurance products for the Cooperation Zone residents, also supporting the development of cross-border motor insurance business in the Cooperation Zone. Support the Cooperation Zone to participate in the construction of the insurance service center in the Greater Bay Area.” It also encourages the collaboration of insurance institutions in both places to innovate new insurance products. The “Macau Vehicles Going North” scheme currently being implemented will create more favourable employment and development conditions for future insurance business and human capital exchanges.
Furthermore, the Opinions Document promotes the high-level opening-up of the financial sector in the Cooperation Zone to Macau, supporting the innovative development of Macau’s financial industry in the Cooperation Zone and the expansion of Macau’s financial industry in the Cooperation Zone.
Under the framework of the Mainland and Hong Kong/Macau Closer Economic Partnership Arrangement (CEPA), the Cooperation Zone entry requirements for Macau’s banking and insurance institutions will be lowered.” This will create important business opportunities and the opportunity for Macau’s insurance institutions to set up subsidiaries, providing a more established insurance services platform for clients. Utilizing Macau’s advantage of local presence will increase its influence on the insurance services platform of China and Portuguese-speaking countries, playing an essential role as a “window” and creating business opportunities in the long-run.
Also, the Opinions Document stresses the importance of “strengthening the building of a talents’ team, the Cooperation Zone rolled up special supportive policies on high quality financial talents, supporting the import and training of high quality talents for the advanced financial industry of the country, furthering the exchanges and cooperation between the Cooperation Zone and Macau about nurturing of talents, encouraging the joint development between the Cooperation Zone and Macau about financial talents training”.
The Opinions Document expressly points out the importance of talent development, understanding the shortage of financial talents, and thus, it is necessary to “import” and “provide training”. This helps to create favorable job opportunities and working environment for the future financial industry in the Cooperation Zone.
Challenges
The 30 rules of the Cooperation Zone have created a favorable platform for the opening-up of Macau’s financial services, and also strengthening the interconnection with Macau’s financial industry by creating a financial environment for Macau residents to live and work across the border.
In addition, the release of the Opinions documents” will bring different challenges to Macau’s financial industry. By lowering the entry requirement for the Macau financial institutions, it will definitely create a valuable business opportunity for both Macau banking and insurance industry. However, it is still an important concern and huge challenges on different factors, which including the requirement for capital and investment thresholds under the “Mainland and Macau Closer Economic Partnership Arrangement” (CEPA) framework, the design of financial insurance products for the future need of local residents and the different legal requirements in both Hengqin and Macau.
Another important challenge is the flow of financial talent between the two places. The importation of high-end financial professionals and the cultivation or training of financial talents will be a crucial part of Macau’s national strategy. To this end, the implementation of the “Talent importation regime of the Macau Special Administrative Region” should be launched as soon as possible in order to match the future strategy of the Macau government and promote the moderate diversification goals of Macau’s economy. By creating a professional service platform and cultivating various types of talents for both Macau and the Cooperation Zone, we can integrate into national policies and engage the world.
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