Hong Kong financial institutions will be allowed to establish consumer finance companies in Guangdong province through a pilot program in the Pearl River Delta, the central government said, according to a Xinhua News Agency statement on Wednesday.
The plan will also promote coordination among airports, harbors and train systems in the Pearl River Delta, including Hong Kong.
"Allowing Hong Kong financial institutions to establish consumer finance companies in Guangdong may provide business opportunities for local financial institutions to tap the huge mainland consumer finance market, as local players have a competitive edge in using proficient marketing techniques," said Terence Chong, executive director of the Institute of Global Economics and Finance.
"I envisage that the cross-border yuan lending pilot scheme can be kick-started shortly to realize Hong Kong-Guangdong financial cooperation," Chong added.
The central government has promoted economic cooperation across the border through a framework agreement signed in April 2010. The framework covered nine areas of cooperation, including infrastructure, manufacturing and education.
The framework envisioned that Guangdong and Hong Kong can formulate an advanced manufacturing and modern service industry base through leveraging Hong Kong's advantages in the service industry and Guangdong's niches in manufacturing.
It also aimed to elevate economic cooperation by concentrating on the development of high-end service industries.
The State Council in 2010 approved the construction of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone through the development of high-end financial, logistics, information technology and professional services industries in the Qianhai area, a 15-square-kilometer special development zone in Shenzhen.
The National Development and Reform Commission said last week that the various pilot economic measures involving the Qianhai area are expected to get the State Council's approval very soon.