Top Chinese legislators and political advisors are calling for the country to set up an EU-style “passporting” mechanism for financial services in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) to allow seamless integration among Hong Kong and Macao special administrative regions and the Chinese mainland as part of China’s push for financial opening-up.

The proposals and suggestions were submitted during the two sessions in Beijing by deputies to the National People’s Congress (NPC), the top legislative body, and members of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC).

Considered the most important political event in China, the two sessions kicked off on Thursday with the CPPCC’s opening meeting

In his proposals, Bai Hexiang, an NPC deputy and head of the People’s Bank of China’s Guangdong branch, urged the exploration of what he called a “single-pass” mechanism and other reforms to bolster financial connectivity in the GBA.

The “single pass” mechanism has been compared to the EU’s passporting system for banks and financial services companies, which allows the firms to operate in any other European Economic Area state without the need to apply for separate authorization.

As China has issued sweeping development plans to build a world-class economic zone in the GBA, including a global financial hub, talk of financial integration – specifically a “single pass,” – has arisen repeatedly. But coming as China is seeking further financial opening-up and cooperation, the proposals and suggestions at the two sessions are gaining traction.

In addition to Bai, Peter Wong Tung Shun, a CPPCC National Committee member and chief executive of the Hong Kong and Shanghai Banking Corp (HSBC), also suggested that a “single pass mechanism” should be set up for licenses and qualifications for financial institutions in the GBA region, and a “highway” should be built for cross-border financial services and capital integration.

The integration of financial regulations and laws in the GBA will help create “seamless connectivity” and a synergistic effect within the region, Liang Haiming, chairman of the China Silk Road iValley Research Institute, told on Thursday.

“The demand for talent and capital mobility is increasing in the Greater Bay Area, with more start-ups established in the region and seeking capital,” Liang said. “Large companies such as Tencent are already listed in Hong Kong, and smaller companies will also want to do the same.”

While it remains to be seen whether a “single-pass” mechanism would be set up soon, top development plans for the GBA have contained sweeping measures to boost financial connectivity among Hong Kong, Macao and the Chinese mainland. The GBA has also been billed as a core component for China’s all-round financial opening-up.

Apart from the “single-pass” mechanism, NPC deputies and CPPCC National Committee members have called for more innovative financial development in the GBA.

In other proposals, Bai also called for the use of digital yuan in cross-border transactions, as well as the establishment of an IPO connect, insurance connect and a carbon market connect in the GBA.

People from the Hong Kong and Macao special administrative regions should also be able to apply for financial services with institutions in the Chinese mainland with their credit records from their own regional markets, according to Wong’s suggestion shared with the Global Times on Thursday.

The proposal will meet the increasing demand for people from Hong Kong and Macao to work in the mainland, it said.

According to Liang, different regulations and management practices, such as the separate credit systems in Hong Kong and the mainland, are causing inefficiency and creating loopholes.

“The authorities are unable to check the credit status of people who want to operate a business that crosses borders,” Liang said.

“In practice, someone who is bankrupt in Hong Kong might still be eligible for a bank loan in Guangdong”

Liang also said that for better financial connectivity, more mechanisms to allow investors to participate in cross-border finance, including insurance and futures trading, should be introduced in the GBA.