China to Strengthen Support for Hong Kong as Global Financial Hub
China’s financial authorities have committed to bolster their support for Hong Kong as the nation’s global financial center. This initiative aims to spark opportunities for increased issuance and trading of bonds and green financing instruments in the city.
According to Li Yunze, Minister of the National Financial Regulatory Administration (NFRA), mainland branches of banks based in Hong Kong and Macau will be entitled to a broader business scope that includes the issuance of bank cards. Financial firms from these two special administrative regions will also benefit from a lower threshold for investing in mainland insurers.
Hong Kong’s Prestige as an International Financial Center
In a speech at the Asian Financial Forum, Li Yunze underscored Hong Kong’s esteemed status as an international financial center attributed to its liquid financial market, extensive talent pool, and robust legal environment. The Chinese government staunchly supports Hong Kong’s development as a pivot between mainland China and the global market.
Promoting Green Financing in Hong Kong
Li Yunze also stressed that Chinese banks and insurers will be urged to issue yuan-denominated bonds and other financial instruments related to green financing in Hong Kong. This maneuver will reinforce Hong Kong’s bond market and cement its role as an offshore yuan trading center.
Egypt Seeks Sustainable Finance Possibilities in Hong Kong
Egypt’s finance minister, Mohamed Maait, expressed a keen interest in issuing green bonds and other sustainable finance instruments in various currencies. During a panel discussion with financial representatives from different countries, Christopher Hui, Secretary for Financial Services and the Treasury, proposed that Egypt consider issuing dim sum bonds. These are yuan-denominated bonds issued in Hong Kong, which is evolving into a prime fundraising destination for countries looking to raise capital.
Hong Kong at the Core of Future Economic Prospects
With the attendance of over 3,000 participants, the 17th Asian Financial Forum strives to spur multilateral cooperation for a shared future. In his opening address, Hong Kong’s Chief Executive, John Lee Ka-chiu, emphasized that the city will be a pivotal player in the eastward shift of economic prospects. Hong Kong is emerging as a superconnector and a super value-adder, bridging the opportunities gap between East and West in the 21st century.
China’s Dedication to Opening its Financial Markets
As NFRA’s first minister, Li Yunze accentuated China’s ongoing commitment to opening its economy and financial ecosystem to global investors. The Connect schemes, enabling cross-border investment, will be enhanced to allow more capital to flow from abroad through Hong Kong into mainland’s bonds, stocks, and derivatives. Similarly, mainland capital is set to penetrate into international issues via Hong Kong. The open-door policy is a long-term state policy for China, steering the country’s financial markets and backing foreign firms venturing into China by offering a congenial business environment and investor protection.
Analyst comment
Positive news. China’s commitment to strengthen support for Hong Kong as a global financial center will open opportunities for increased issuance and trading of bonds and green financing instruments. This will fortify Hong Kong’s bond market, solidify its position as an offshore yuan trading center, and attract more foreign capital. The move also demonstrates China’s commitment to open its financial markets, enhancing cross-border investment and providing a good business environment for foreign firms investing in China.
