|João Nuno Riquito||Carlos Eduardo Coelho|
In the last quarter of 2016, the Chinese premier announced several new measures and policies focusing on the diversification of Macau's very one-sided (gaming) economy. In particular, some of those measures are expected to support the development of Macau's finance industry ultimately aiming at the transformation of its economic structure.
Among the measures announced, the following grasped the financial players' attention: (i) support for the setting up of Macau as a renminbi (RMB) clearing centre for Portuguese speaking countries (PSCs); (ii) relocation of the China-PSCs $1 billion cooperation and development fund headquarters from Beijing to Macau, and; (iii) support for the setting up of an export credit insurance system.
The measures will most likely capitalise on the opportunities provided by the RMB's growing internationalisation and will make it easier for the fund to attract potential interested partners in receiving funding. They will also attract more mainland China banks to cooperate with the PSCs and stimulate the creation of new financial services.
Several voices have been raised as to the need for Macau SAR to update and adapt the existing legal framework of its financial system (its most important laws, in particular, the Financial System Act, date back to the last century) to prepare for the implementation of such measures. Others, correctly assuming the lack of local qualified manpower, warn about the strict labour laws which tend to make it difficult for companies (irrespective of their origin) to attract the much-needed financial savvy of qualified foreign individuals.
Macau's financial sector regulator is aware of the urgent need to modernise and has been pushing further for the development of the local financial industries. Recently, it announced amendments to the prevailing laws regarding financial leasing companies and has been encouraging local banks to provide wealth management services for overseas Chinese nationals.
Interesting times lie ahead in the Macau financial system if local authorities roll up their sleeves and get down to work. The major private players are keen for this to happen.
João Nuno Riquito and Carlos Eduardo Coelho