00:00We're watching what goes on in some of the financials in Hong Kong, the insurers here this morning, as of
00:05course what we saw yesterday here that was quite a bit of a sell-off on concerns of a report
00:10that some banks have suspended opening bank accounts in the city for clients in mainland China.
00:16It's the latest reaction to Beijing's unprecedented crackdown on illegal cross-border trading.
00:21Let's bring in our chief financial correspondent, Stephen Engel, on really kind of, we continue to see this crackdown, the
00:27fallout from it.
00:27Yeah, that's right. I mean, remember, it was on May 27th that Bloomberg had this story about some compliance checks
00:34that are being ordered for wealth accounts on both sides of the border.
00:39Also, those brokerages that the mainland authorities were saying there were some illicit, unlicensed brokerages that were helping facilitate cross
00:47-border flows from the mainland into Hong Kong.
00:50And again, we've seen the numbers. I mean, we're not implicating any of these banks, but Bank of China HK
00:56reported a 21% surge in high-end cross-border customers in 2025.
01:00HSBC says they saw a roughly 30% increase in Hong Kong customers since January 2023, with two-thirds of
01:07them identifying as non-resident HSBC1 account customers, standard chartered, onboarded 275,000 affluent new-to-bank customers globally in
01:182025, with Hong Kong the biggest market.
01:21I'm just rolling out these statistics to show you how much money has been flowing into Hong Kong, and a
01:25lot of it, allegedly or illicitly, has been coming across the border.
01:30Chinese authorities are obviously concerned about capital flows at a time of an unstable Chinese domestic economy.
01:36Keep in mind, there is a US$50,000 limit per person of outbound remittances allowed.
01:43But again, a lot of mainland customers have come across the border, or even through banks in mainland buying insurance
01:51policies in Hong Kong.
01:52So that's why insurance companies are probably being asked to increase their scrutiny and their compliance.
01:57Banks, you mentioned it, Bank of East Asia, according to S&P, Shanghai branch has suspended opening of such accounts.
02:03And HSBC, according to S&P, has warned that all funds deposited into investment accounts must comply with Hong Kong
02:11regulations.
02:12So it's China and Hong Kong regulators in lockstep right now.
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