The Hong Kong Monetary Authority (HKMA) has signed a memorandum of understanding (MoU) with the PAA Digital Trade Alliance (PAA). The agreement aims to promote digital trade finance.

Both sides will work on joint projects to link cargo and trade data between Hong Kong and PAA member economies.

They signed the MoU at the HKMA’s Cargox Solution Day, which drew more than 300 people from banks, data firms and government bodies.

At the event, the HKMA also shared results from its Cargox pilot. Together with the Shanghai Data Bureau, it has linked its Commercial Data Interchange (CDI) to a trade platform built by the bureau.

This link is called Cargox Connect. It gives a first group of five pilot banks access to trade declaration data from the Yangtze River Delta.

These banks are Bank of China (Hong Kong), Hang Seng Bank, HSBC, ICBC (Asia) and Standard Chartered Bank (Hong Kong).

Banks use this data to check trades and the firms behind them. According to the HKMA, this has helped Hong Kong firms draw down loans faster.

So far, the pilot has led to ten approved trade finance loans worth HK$180 million. Next, the HKMA plans to extend the model to other parts of the Chinese Mainland.

“By leveraging our CDI data infrastructure, Cargox will continue to expand from local to regional levels, building a more efficient and inclusive digital trade ecosystem across borders,”

said Howard Lee, Deputy Chief Executive of the HKMA.

“Together, we will eliminate the traditional frictions in international trade, giving SMEs across ASEAN and neighbouring economies unprecedented access to capital,”

said Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, Chair of the PAA.

Featured image: Edited by Fintech News Hong Kong, based on image by Hong Kong Monetary Authority via its website.