HSBC sets up $880 mln technology fund in China's Greater Bay Area
Updated 18:23, 12-Jun-2019

HSBC said on Tuesday that it has launched an 880-million-U.S.-dollar credit fund, the GBA+ Technology Fund, to finance early stage companies in south China's Greater Bay Area (GBA).

The GBA+ Technology Fund will provide lending to high-growth companies in the Chinese mainland and the Special Administrative Regions of Macao and Hong Kong, in the sectors including e-commerce, fintech, robotics, biotech and healthcare technology.

According to HSBC, to be eligible borrowers from the fund, the startups will need to have sustainable business models and may have secured an initial one to two rounds of investment from venture capital or private equity.

"The economic cooperation in the GBA is increasingly connected. Many clients of HSBC Hong Kong will benefit from it, especially clients in the new economy industry. The business models of these companies are different from the traditional ones we served in the past, as they have an evolving financing eco-system. The GBA+ Technology Fund is dedicated to serve growth-oriented companies of the new generation, with innovative service modes," said head of HSBC commercial banking in Hong Kong, Zhao Minzhong, Xinhua reported.

Shenzhen at night /VCG Photo

Shenzhen at night /VCG Photo

"The Delta Region enjoys being a globally influential innovation and technology hub. Now more than 45,000 hi-tech companies operate in Guangdong Province. This number increased 37 percent on a year-on-year basis, making Guangdong stand at a leading place in the country," said Wang Liwei, head of HSBC Guangdong commercial banking.

"The launch of the GBA+ Technology Fund will help us finance innovative companies who are driving the transformation of Guangdong’s economy at a crucial stage in their growth," said Wang, according to Xinhua.

China's Greater Bay Area embraces new opportunities

The framework for GBA was unveiled in February 2019, aiming to better integrate Hong Kong, Macao and nine cities in Guangdong Province for future development and economic cooperation.

The GBA has a population of 70 million people in China, and had a combined GDP of 1.6 trillion U.S. dollars in 2018, making it larger than Australia if it were a stand-alone economy. United Overseas Bank estimated that the region’s GDP could exceed 2.7 trillion U.S. dollars by 2025 and four trillion U.S. dollars by 2030.

The GBA encompasses Shenzhen. Often referred to as China’s Silicon Valley, Shenzhen is home to tens of thousands of technology companies and start-ups, among which the most noted are DJI, Tencent and Huawei.

The GBA+ Technology Fund emerges in the context of that tensions have been escalated between China and the United States and ranging from trade to technology. No matter how the China-U.S. situation develops, the setup of GBA+ Technology Fund will be one of the driving forces for China to cultivate its next generation's tech giants in the area.