A powerful typhoon was approaching southern China on Wednesday evening, prompting Hong Kong to issue its third highest storm warning as neighbouring Macau and other nearby coastal cities prepared for the prospect of a direct hit.

Typhoon Ma-on -- which shares a name with a mountain in Hong Kong and translates as "saddle" -- was packing wind speeds of up to 110 kilometres (62 miles) per hour on Wednesday evening and lay about 300 kilometres off China's southern coast.

"Ma-on is expected to be closest to Hong Kong (Thursday) morning and may skirt within about 200 kilometres south-southwest of the territory, posing a considerable threat," the Hong Kong Observatory warned.

"Under the influence of storm surges and an astronomical high tide, low-lying areas may be flooded".

The observatory declared a T8 warning, which advises people to return home and leads to the cancellation of ferries and classes -- although the city's subway system continues to operate.

The storm is projected to follow a similar path as 2017's Super Typhoon Hato, which killed 10 people in Macau and caused widespread flooding in Hong Kong.

However, Ma-on is expected to be less destructive, meteorologist Leung Wing-mo told local news outlet HK01.

The eye of the storm is currently projected to make landfall around 8am (0000 GMT) Thursday near the coastal city of Yangjiang, some 160 kilometres west of Macau.

Southern China is frequently hit in summer and autumn by typhoons that form in the warm oceans east of the Philippines and then travel west.

While they can cause temporary disruption to cities like Hong Kong and Macau, fatalities have become much less common thanks to stronger building codes and better flood management systems.

The risk of fatalities is generally higher in more rural parts of southern China.

Like much of China, Hong Kong and Macau have been sweating through a heatwave and enduring a sweltering summer.

According to the Hong Kong Observatory, July was Hong Kong's hottest month ever recorded and there has been little let-up so far in August.

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