Hong Kongers’ Cross-Border Borrowing Raises Concerns in Greater Bay Area

As more residents of Hong Kong choose to settle long-term in China’s Greater Bay Area, there is a rising demand for cross-border financial services such as loans, social security purchases, and other banking options. Industry experts warn that issues like data transfer, regulatory compliance, and institutional mismatches continue to be significant hurdles.

The need for mainland-based loans among Hong Kong residents is increasing, according to the chief Asia-Pacific product officer at a major credit reporting agency in Hong Kong, speaking at the 2025 Hong Kong Fintech Week. Many cross the border weekly for shopping, and a growing number are starting businesses and purchasing homes within the Greater Bay Area, creating a need for mainland borrowing options, he explained.

These individuals often possess strong credit histories in Hong Kong but lack credit records in mainland China—a gap that banks are eager to address, he added.

However, the credit data systems used by mainland banks are not fully integrated with those in Hong Kong, noted a researcher at a prominent regional development institute. Differences in data management, storage regulations, and legal standards pose real barriers to the smooth exchange of credit information, she explained.

In cases where a Hong Kong resident defaults on a loan from a mainland bank, debt collection and legal enforcement become complex and expensive, especially when crossing jurisdictions, according to a university professor specializing in financial law. He also emphasized that Hong Kong’s status as a global financial hub and its capital flow diversity present additional challenges for anti-money laundering efforts.

The expert advocated for the expedited development of a cross-border credit cooperation system within the Greater Bay Area framework, with the People’s Bank of China’s credit bureau and Hong Kong regulators collaborating to establish a unified system that recognizes and translates credit histories.

“Although the current demand is relatively modest, mainland banks are eager to push forward this initiative, aiming to develop a comprehensive cross-border credit verification platform,” said the credit officer. “This system could also be expanded in the future to facilitate those coming to China for work or study from countries like Singapore and Malaysia.”

The disparity in lending rates between Hong Kong and mainland China isn’t a primary factor in this situation. At the end of last month, mortgage rate caps in Hong Kong ranged from 3.25% to 3.5%, whereas first-tier mainland clients could secure loans at approximately 3%.

The majority of borrowing needs among Hong Kong residents in the mainland are linked to consumption. For example, obtaining a mainland credit card could significantly simplify daily expenses and transactions, said the analyst.

Additionally, purchasing social security coverage in mainland China is gaining popularity among Hong Kong residents. A resident in his 50s estimates that paying CNY898 (about USD126) monthly into a pension fund could enable him to retire in Shenzhen in 20 years with a monthly benefit exceeding CNY3,000 (around USD422). “It’s a break-even point in just four years,” he commented.

By August last year, approximately 332,800 residents from Hong Kong and Macau had enrolled in pension, work injury, and unemployment insurance programs in Guangdong Province, reflecting a nearly 119% increase from the end of 2021, according to official data from the provincial social security authority.