Dr Charles YEUNG (Chairman of the 48th, 49th terms of office) July 2015
We look forward to Hong Kong capitalising on its unique strengths in financial services to fully support financial cooperation between both places in order to seize the huge business opportunities arising from China’s ‘go global’ strategic development.
The mutual recognition of funds between the Mainland and Hong Kong, effective on 1 July, together with the constantly improving “Shanghai-Hong Kong Stock Connect” and the upcoming “Shenzhen-Hong Kong Stock Connect” indicate that the mechanism for financial interconnectivity between both places is gradually taking shape. This will help drive each other’s capital markets towards deeper cooperation. It has great significance in consolidating Hong Kong’s offshore RMB business and promoting RMB internationalisation. We look forward to Hong Kong capitalising on its unique strengths in financial services to fully support financial cooperation between both places in order to seize the huge business opportunities arising from China’s “go global” strategic development.
Financial Interconnectivity Adds to Hong Kong’s Strengths
With the implementation of the mutual fund recognition scheme, eligible Mainland and Hong Kong funds can be directly offered for sale across the border. Through Hong Kong, Mainland funds can be sold to other countries and foreign capital can enter the Mainland’s huge fund market. It can be expected that the number of funds registered in Hong Kong will gradually increase, with more fund and asset management-related administrative, sales and marketing activities being conducted in Hong Kong. This will not only help expand Hong Kong’s fund and asset management businesses, but also greatly increase the demand for finance-related professional services.
In addition, the country’s active deployment of its “One Belt, One Road”, “Asian Infrastructure Investment Bank” and “Silk Road Fund” strategies will boost the infrastructure investment and financing needs of the regions along the belt and road, providing a huge space for developing financial services such as cross-border trade settlement, asset management and risk management. As a major regional financial and commercial centre, Hong Kong has certain edge in providing financial services and support. The gradual realisation of financial interconnectivity between the Mainland and Hong Kong enables Hong Kong to make better use of its functional role as a “super-connector” in the process of facilitating Mainland enterprises to “go global” to align with international financial standards.
Strengthen Hong Kong’s Financial Facilities
In fact, Hong Kong has considerable experience and strengths in financial regulation and business development. Particularly, its professional legal and accounting support services are at world-class standards and trusted by both domestic and overseas enterprises. We hope the HKSAR Government will make use of the opportunities arising from the in-depth financial cooperation between the Mainland and Hong Kong to provide more policy support measures for the development of Hong Kong’s finance-related industries in order to further enhance Hong Kong’s strengths in financial and professional services. Also, on the basis of the existing CEPA, Hong Kong can actively discuss with the relevant Mainland authorities on relaxing the restrictions on operation and practice related to financial services, speeding up the mutual recognition of professional qualifications, simplifying administrative and approval procedures, and improving the scale and efficiency of financial product sales and transactions between the two places.
Furthermore, the mutual fund recognition scheme has a positive role in promoting the expansion of Hong Kong’s offshore RMB business and development of asset management services as it will help speed up the flow of RMB capital into the Hong Kong market. In our view, Hong Kong’s financial regulators can actively strengthen ties and cooperation with the industry, conducting comprehensive monitoring and providing clear guidelines in areas such as fund investment management, cross-border capital flows, information disclosure and investor protection mechanism. This will enhance investor confidence and further support Hong Kong to become Asia’s leading centre for fund distribution, offshore RMB services and asset management.
All in all, Hong Kong’s success to become an important international financial centre is built upon the joint efforts of all sectors of the society over the years. In celebration of the 18th anniversary of Hong Kong’s reunification with the motherland and the establishment of the HKSAR Government, we hope all sectors of the society can put aside their disputes over the constitutional reform and refocus their attention on developing the economy and improving people’s livelihood by maximising Hong Kong’s strengths in the economic and financial areas. By actively supporting the country’s deepening of economic reforms, Hong Kong can work hand-in-hand with the Mainland to drive both places towards a more stable and all-rounded financial cooperation.