The skyline at night of the Macao Special Administrative Region, China Photo: IC

The Macao Special Administrative Region has realized that diversified economic growth is critical for sustainable development amid the COVID-19 pandemic, and the finance industry could be the ideal focus. Given the facilitation advantages of the mainland, it could become a new financial hub, said a deputy to the National People's Congress (NPC).

An innovative financial management suggestion with regard to the Guangdong-Macao "intensive cooperation zone" in Hengqin was raised at the ongoing two sessions by NPC deputy and president of Macau Development Strategy Research Center, Sio Chi Wai.

The suggestion includes items of promoting free cross-border capital inflow, outflow, and exchanges within the zone, as well as launching a "single pass" financial management system between Hengqin and Macao and establishing a financial electronic monitoring system. 

To set up a Guangdong-Macao "intensive cooperation zone" on Hengqin Island in Zhuhai, South China's Guangdong Province would mark a critical path in promoting diversified and sustainable development of Macao's economy, Sio told the Global Times.

As an important production factor, border capital flows and free exchanges would be conducive to financial market integration for Macao and Hengqin, and to the internationalization of China's yuan, Sio said.

A "single pass" financial management system between Hengqin and Macao would help business operations and supervision in the cooperation zone. Also, the establishment of a financial electronic monitoring system would safeguard against money laundering and capital misuse, Sio explained.

Experimenting with innovative financial management in Hengqin could create better conditions for the moderately diversified and dynamic development of Macao's economy, as well as giving Hengqin a full play as an open pilot zone and a reform frontier, he noted.

Although global financial centers exist, such as China's Hong Kong Special Administrative Region and Japan's Tokyo, Macao could develop in a unique way, Sio stressed.

Compared with Tokyo, Macao enjoys a broader market and more abundant resources in China. Also, Macao is more flexible than Hong Kong, since there are emerging new elements in the financial industry, but as a mature international financial center, Hong Kong may not be able to make significant adjustments due to its deep-rooted traditions. This is an opportunity for Macao, he said.

Macao is establishing its cross-boundary renminbi-clearing center, bond market, and is considering a stock exchange and futures trading market. 

It could become a second offshore financial center for China and cultivate a sound financial market structure. Therefore, financial market connectivity between Macao and the Chinese mainland through Hengqin is necessary for the diversification of Macao's economy, but also an indispensable part of Macao's efforts to build a complete financial market.

According to Sio, China has already contained COVID-19, with its economy recovering earlier than others. It still plays a locomotive role in global economic growth, and other countries have maintained confidence in the Chinese market. 

Based on its unique ties with Portugal, Macao could develop new bonds with EU, Africa, and Latin American countries. Besides, enhancing the financial industry could promote the development of emerging sectors such as science and technology. Macao could also lure advanced tech firms from overseas which would spur diversified economic growth, according to Sio.