Hong Kong’s Chief Executive Carrie Lam Cheng Yuet-ngor said on the 20th that although Hong Kong has experienced unprecedented severe challenges in the past two years, including social unrest and the new crown epidemic, it depends on the strong support of the central government, including the Hong Kong National Security Law enacted by the Standing Committee of the National People’s Congress last year. The promulgation and implementation, as well as the passage of the revised Annex I and Annex II of the Basic Law this year, improved Hong Kong’s electoral system, implemented "patriots ruling Hong Kong", and restored Hong Kong’s social stability and political security.
These two major measures and the continuous improvement of the system of the SAR government have allowed the implementation of "One Country, Two Systems" to return to the right track and opened a new stage for the further development of Hong Kong.
Carrie Lam said that in order to have a good situation, she also needs her own advantages.
The past two years have fully demonstrated that the city of Hong Kong can withstand storms, and Hong Kong, as an international financial center, has not been damaged in the slightest.
In fact, Hong Kong's robust and mature regulatory system and rigorous risk management measures have enabled Hong Kong's financial system to show extraordinary resilience and stability during difficult times.
The linked exchange rate system has worked well as always, the stock market is booming, and the Hong Kong dollar market has recorded a net inflow of funds in 2020, reflecting the continued interest and confidence of investors in the Hong Kong capital market.
The banking system remains robust. Total deposits in 2020 will increase by 5.4% compared to the previous year. The liquidity and capital adequacy ratios of major banks are much higher than international regulatory standards. Other links in the financial services industry, such as the insurance market, are operating. Orderly.
In March of this year, the National People’s Congress passed the "14th Five-Year Plan", which established Hong Kong’s important functional positioning in the overall development of the country. The relevant financial positioning includes supporting Hong Kong to enhance its status as an international financial center and strengthening global offshore RMB business. The functions of the hub, the functions of an international asset management center and a risk management center, as well as the deepening and expansion of the interconnection between the Mainland and Hong Kong financial markets, and the high-quality construction of the Guangdong-Hong Kong-Macao Greater Bay Area.
The "Opinions on Financial Support for the Construction of the Guangdong-Hong Kong-Macao Greater Bay Area" issued in May last year also further supports Hong Kong's deep integration into the country's financial reform and opening up, and provides strong support for the construction of an internationally competitive first-class bay area and world-class city clusters. .
The SAR government will continue to formulate and implement corresponding policies and measures with the "make a difference" policy, make good use of the advantages of Hong Kong's connectivity with the mainland and the world, and actively seize the huge development opportunities brought by the development of the Greater Bay Area and the "Belt and Road" initiative. .
She said that Hong Kong can play a key role in five aspects in the country's financial development.
First, Hong Kong can help the internationalization of the RMB.
With the support of the central government, Hong Kong is the world's largest offshore renminbi business hub. It has a leading position in renminbi settlement, financing and asset management, and provides diversified renminbi products and services.
Hong Kong will continue to explore with the industry and the mainland authorities to expand the channels for the two-way circulation of cross-border RMB funds, and continue to optimize and broaden the interconnection mechanism of the financial markets of the two places, and seize the opportunities brought by the construction of the Greater Bay Area and the advantages of first-hand trials.
Second, Hong Kong can provide reliable and diversified financing services for mainland enterprises.
Hong Kong is an ideal listing platform for companies from all over the world. The total annual IPO funds raised in the past 12 years has ranked first in the world seven times.
Currently, more than half of the companies listed on the Hong Kong Stock Exchange are Mainland companies, which account for approximately 80% of the total value of the Hong Kong stock market.
With the rapid development of emerging and innovative industries in recent years, the Hong Kong Stock Exchange has implemented a new listing system. So far, 50 companies in emerging and innovative industries have been listed in Hong Kong under this system, and the total amount of funds raised exceeds HK$510 billion.
In addition, in order to strengthen Hong Kong’s function as an international asset management center, we are committed to introducing new fund structures, including open-end fund companies and a limited partnership fund system for private equity funds. Since the latter was established in just eight months, there have been more than 200 fund registrations.
Provide tax relief for the carried interests distributed by private equity funds operating in Hong Kong, and establish a system to attract funds that have been established in other places to relocate to Hong Kong, and to subsidize the establishment of open-end fund companies in Hong Kong in the next three years.
These policies and measures will help attract private equity funds from all over the world, with Hong Kong as the hinterland and bridge.
Investors use Hong Kong's international financing platform to carry out private equity investments in the Greater Bay Area, which is conducive to mainland enterprises in absorbing overseas funds to develop their business beyond the traditional bank financing channels.
Third, Hong Kong can provide berthing and management services for the mainland's funds abroad, and play its role as a safe haven for funds.
The free flow of funds in Hong Kong and the free convertibility of the Hong Kong dollar are protected by the Basic Law. Together with the linked exchange rate system of up to 490 billion US dollars, the foreign exchange reserves equivalent to nearly twice the monetary base are backed up, which can effectively maintain the stability of the Hong Kong currency.
In addition, Hong Kong has a first-class asset management infrastructure, regulatory system, ecosystem, and talent pool.
In 2019, Hong Kong’s assets and wealth management business assets exceeded 28 trillion Hong Kong dollars, and more than 60% of the funds came from foreign investors. It is the largest hedge fund and second largest private equity fund base in Asia. These figures illustrate the investment in all parts of the world. People’s confidence in Hong Kong.
Hong Kong is also intensively following up the preparations for "Cross-border Wealth Management" to accelerate the implementation of this long-awaited plan by the industry, open up a broader market for the financial industry, and provide more for residents of the Greater Bay Area. The choice of wealth management products will at the same time strengthen Hong Kong's role as an important bridge for capital to and from the Mainland.
Fourth, Hong Kong can function as a risk management center.
In order to consolidate Hong Kong’s position as an international risk management center, the SAR government has implemented a series of measures in the first half of this year, including halving the profit tax rate for eligible insurance businesses such as maritime and special insurance; establishing a new regulatory framework and launching The funding scheme facilitates the issuance of insurance-linked securities (including catastrophe bonds) in Hong Kong; broadens the scope of insurable risks for captive insurance companies established in Hong Kong; and optimizes the legal framework for the supervision of insurance groups.
Hong Kong is also promoting the Hong Kong insurance industry to set up after-sales service centers in cities in the Greater Bay Area as soon as possible, and strive to implement an "equivalent prior recognition" policy for the insurance of Hong Kong vehicles entering Guangdong via the Hong Kong-Zhuhai-Macao Bridge as soon as possible, in order to promote the interconnection of the insurance market Intercommunication.
Fifth, the global response to climate change and the promotion of sustainable development have become an important topic, and it is a challenge that everyone needs to work together to address.
The central government proposed in the "14th Five-Year Plan Outline" to promote a comprehensive green transformation of economic and social development, and strive to achieve a peak carbon emissions by 2030 and achieve carbon neutrality by 2060.
Hong Kong will strive to achieve carbon neutrality by 2050.
Hong Kong established a green and sustainable finance inter-institutional steering group last year and issued a strategic plan. It will work with the financial industry and stakeholders to promote the plan to consolidate Hong Kong's financial ecosystem and promote Hong Kong as a green and sustainable financial hub in the region , To support green enterprises and projects in the Mainland, to promote the construction of national ecological civilization and green development, and to support the country’s goal of achieving carbon neutrality by 2060.
(Main station reporter Zhu Dan and Zhou Weiqi)