Development Plan for Guangdong-Hong Kong-Macao Greater Bay Area and Fintech(2/2)Number of Start-ups increased in Hong Kong

This article is written by Mr. Koichiro Ohira, Chief Fellow, Institute for International Socio-Economic Studies（NEC Group）

Cashless
In China Fintech service is widely available such as “Alipay” by Alibaba Group and “WeChat Pay” by Tencent which offer the service of financial settlement, loan and financing and other variety of services only with smart-phone.

In Shenzhen this kind of Fintech service is also popular and widely deployed in such places as super-markets, unmanned convenience stores, Karaoke box for single occupancy where cashless payment is rather basic and mandatory.

On the other hand Hong Kong, a big financial city internationally recognized and leading Asia area, where several hundred of domestic and foreign banks and insurance companies are located, is surprisingly rather behind Mainland China in the introduction and deployment of Fintech service and the development of Fitech companies.

The reason behind why this new Fintech service has not been popular in Hong Kong might be because in Hong Kong financial infrastructures such as branch of banks has been already developed earlier and “Octopus”, prepaid transportation IC card , has also being already and widely used.

The situation is same in Japan as far as unpopular new service of being Fintech is concerned.

In Hong Kong, however, in order to improve the situation a variety of other arrangements are being introduced and deployed such as virtual banking service only available on internet without use of services at actual branches, financial and money transfer service using only telephone numbers and internet mail address, quick financial settlement service using QR code, wo-dimensional code, and Regulatory Sandbox.

Unicorn Start-Ups
Thanks to enhancement and improvement of assistant facilities such as “Cyberport” the number of start-ups is getting increased in Hong Kong. Among start-ups there several “Unicorn start-ups” are rising up such as WeLab and BitMEX.

In Development Plan for Guangdong-Hong Kong-Macao Greater Bay Area, Hong Kong is named as leading city in the financial sector and further enhancement of its position as international financial center is planned.

Hong Kong has long been a center for foreign companies to make investment to China, but, there is a view lately that Hong Kong will be a new window for China to make investment to foreign countries in the future.

Unique Financial Service
According to the Development Plan unique local development and arrangements are in progress, such as local private equity trading market in Guangzhou, experimental area for innovative development of insurance in Shenzhen, collaboration of financial service with Portuguese-speaking nations in Macau. 

For financial section demonstrations and up risings in Hong Kong are regarded as critical issue. In the new local development plan of Shenzhen announced in August no substantial change in the framework of Development Plan for Guangdong-Hong Kong-Macao Greater Bay Area but there is an indication that Shenzhen might play more central and important role in the financial section.

If the Development Plan for Guangdong-Hong Kong-Macao Greater Bay Area is progressed as planned and scheduled, the area will surely show how new cities and finance sector are to be developed with advanced innovation and technology, but, political issues involved might hinder the progress.

Question remains how to solve this issue and problem.