The Dream Factory of China

Hang Seng Bank, a unit of HSBC, opened a fund house Thursday in Shenzhen’s Qianhai, becoming the first Hong Kong company to materialize a government call to remodel the zone into a financial hub with the help of Hong Kong expertise.

Hang Seng Bank holds 70 percent of the newly formed Hang Seng Qianhai Fund Management Co., which is the first onshore fund management firm majority held by a non-mainland entity. The venture has a registered capital of 200 million yuan (US$30.4 million).

Hang Seng’s partner in the venture is the financial arm of the Qianhai Authority, Shenzhen Qianhai Financial Holdings, which owns the remaining 30 percent.

“It’s a milestone of cooperation between Hong Kong and Shenzhen and a substantial progress in materializing Central Government policies that have tasked Qianhai with financial reforms,” said Rose Lee, chief executive of Hang Seng Bank.

“The joint venture will help boost innovation in the financial industry on the mainland.”

Hang Seng’s application for the joint venture was submitted in July 2015 and approved in June under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).

Li Qiang, chairman of Qianhai Financial, said the new venture marks the latest step toward linking Qianhai with Hong Kong.

Set up in 2010 by the Qianhai Authority, Qianhai Financial is an agency that aims to facilitate partnerships for financial innovation in Qianhai. It is also waiting approval of applications to form securities firms with HSBC and Bank of East Asia.

The Central Government approved the Qianhai zone in 2010 specifically to promote cross-border development of the service industry in partnership with Hong Kong.

The zone offers companies more flexibility in cross-border lending than is normally allowed on the mainland.