Zhang Bohui: Building Qianhai Cooperation Platform, ESG Investment May Be New Engine
On February 18, 2019, the State Council issued the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area and called for its strict implementation, which means that to build an international financial center in the “dual cities” of Shenzhen and Hong Kong and solidly promote the interconnection of financial markets, boosting the development of the Greater Bay Area with finance has become a top priority. In this regard, Zhang Bohui, Presidential Chair Professor and Executive Associate Dean of the School of Management and Economics of The Chinese University of Hong Kong, Shenzhen, suggested in an interview with Guangming Daily that it is necessary to ensure that the advantages of Shenzhen and Hong Kong complement each other, deepen the cooperation mechanism, give full play to the role of Qianhai Cooperation Zone. Carry out ESG investment and financing pilot work, so as to accelerate the process of building an international financial center in the "dual cities" of Shenzhen and Hong Kong.
Hong Kong's financial sector develops relatively early, with a highly open business environment and an international market, as well as highly developed professional services such as healthcare, logistics and trade, which have developed to a certain scale and are well known internationally. Secondly, Hong Kong has a strict and comprehensive regulatory and legal system, and has particular advantages in aligning with international financial operating rules and the legal system. Hong Kong is also the world's largest offshore RMB market and an important hub for multinational corporations and international financial institutions in the Asia-Pacific, with a very comprehensive system of financial services and products.
Compared to Hong Kong, the development of Shenzhen's financial sector relies heavily on a strong manufacturing sector, with significant advantages in terms of the degree of market development and strength in technological innovation. However, due to the lack of an effective financial mechanism, small and medium-sized enterprises and science and innovation enterprises still face certain difficulties in terms of financing and venture capital.
This shows that Shenzhen and Hong Kong have a degree of complementarities in financial activities. Professor Zhang Bohui said that the conditions are ripe for building an international financial center in the "dual cities" of Shenzhen and Hong Kong. In the future, Shenzhen and Hong Kong can explore the cooperation mechanism in depth, focusing on how to combine the financial rules of Hong Kong with the manufacturing industries of other cities in the Greater Bay Area, so as to strengthen advantages of the two places in the overall economic scale, technology, industry and finance, and take cooperation between Hong Kong and Shenzhen to a deeper level of development.
As a significant hub connecting the two financial centers of Hong Kong and Shenzhen, Qianhai should play its irreplaceable role as a bridge. Professor Zhang Bohui mentioned that Qianhai should fully draw on and align with Hong Kong’s financial rules, establish some special cooperation platforms, comprehensively deepen the construction of the Qianhai Shenzhen-Hong Kong Cooperation Zone, take the lead in realizing the convenient flow of factors and alignment of rules in a specific region, create a new cooperation mechanism for Hong Kong and Shenzhen to discuss, build, manage and share together, and create a quality development soil for RMB internationalization.
It is worth noting that Professor Zhang Bohui pointed out that as China’s "carbon peaking and carbon neutrality" targets were put forward, ESG (environmental, social and governance) investment will become an important starting point for the next step of China's and even the global economic transformation. The development of a green economy and green energy is an inevitable direction. Qianhai can take ESG as an important theme in building an international financial center in the "dual cities" of Shenzhen and Hong Kong and promoting the internationalization of RMB, and Hong Kong and Shenzhen can work together to vigorously develop green finance, carry out ESG cross-border investment and financing pilot projects, promote RMB outbound direct investment and financing, and help build a RMB carbon financial market product and service system, so as to make ESG investment an accelerator in the process of building an international financial center in the "dual cities" of Shenzhen and Hong Kong.
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