2023-06-27 07:39:00
Hong Kong’s financial market is full of vitality and competitiveness
Release time: 15:39, June 27, 2023 Source: China News Network
[Explanation]On the eve of the 26th anniversary of Hong Kong’s return to the motherland, with the sound of the Hong Kong Stock Exchange, the Hong Kong stock market officially launched the “Hong Kong dollar-RMB dual-counter model” and “dual-counter banker mechanism”. This new model is undoubtedly positive. Hong Kong’s financial market, which is in the post-epidemic recovery stage, has given a “boosting shot” and also set an important milestone in the development history of Hong Kong stocks.
[Live Voice]Chen Maobo, Financial Secretary of the Hong Kong Special Administrative Region Government
Today marks a significant milestone for the stock market as a whole. With the launch of the “HKD-RMB Dual Counter Model”, 24 companies will be offering both HKD and RMB shares, which is really encouraging. Obviously, the internationalization of RMB is an inevitable trend in the future.
[Explanation]As an international financial center and the world’s largest offshore RMB business center, in Hong Kong, the financial services industry is the largest pillar industry, accounting for more than one-fifth of the GDP. The “dual counter model” will play an important and active role in improving the liquidity, trading volume and activity of the Hong Kong stock market, and promoting the internationalization of RMB.
[Concurrent]Xiao Geng, Chairman of the Hong Kong Institute of International Finance
This kind of service actually superimposes two products, one is that mainland investors can buy and sell Hong Kong stocks, and the other is that they can be converted into RMB following buying, and it is offshore RMB, so it avoids Exchange rate risk, on the other hand it has offshore investment. As our “outer circulation”, Hong Kong is also an international financial center. Because China’s economic volume is already very large and continues to expand, most of its finance is onshore finance, and its demand for offshore financial services is increasing day by day, so the best platform for offshore finance is platform in Hong Kong.
[Explanation]In fact, strengthening Hong Kong’s dominant position as the largest offshore RMB business center is an important policy goal that the sixth Hong Kong SAR government has consistently pursued in the past year.
[Explanation]In mid-May this year, the Mainland and Hong Kong interest rate swap market interconnection cooperation, the “Swap Link” was officially launched. Overseas investors can participate in the domestic RMB interest rate swap market through the “Northbound Swap Link”.
[Concurrent]Li Jiachao, Chief Executive of the Hong Kong Special Administrative Region
The “Swap Link” Northbound Trading (“Northbound Swap Link”) was officially launched, marking another important milestone in the integration of the financial markets of the Mainland and Hong Kong. The new measures will provide international investors with richer investment and risk management tools, and strengthen Hong Kong’s position as the world’s largest offshore RMB business center and international risk management center.
[Concurrent]Xiao Geng, Chairman of the Hong Kong Institute of International Finance
“Swap Connect” is actually an interest rate swap, and it is matched with “Bond Connect”. That is, following you buy a bond, you can swap the interest rate and term of the bond with the same investors in the same market, achieving a change in risk preference (function). This is of great significance, why? Our domestic bond market is very large, and the Hong Kong market is not so large, but the advantage of the Hong Kong market is that it has many foreign investors. Therefore, through these interest rate swaps, the two bond markets, one onshore and one offshore, are completely connected.
[Explanation]Behind the rapid economic development of Hong Kong is the long-term support of the state. On June 14, the Ministry of Finance issued 12 billion RMB treasury bonds in Hong Kong. This is the first RMB treasury bond issued by the Ministry of Finance in Hong Kong this year. Throughout this year, the Ministry of Finance will issue 30 billion yuan of treasury bonds in Hong Kong in four phases to strongly support the construction of Hong Kong as an international financial center. On September 28, 2009, the central government issued RMB treasury bonds in Hong Kong for the first time. It has been the 15th consecutive year. Counting the 12 billion yuan issued this year, the Ministry of Finance has issued a total of 273 billion yuan treasury bonds in Hong Kong. The five-year period has gradually developed to two-year, three-year, ten-year, etc. Offshore RMB products have gradually been enriched, and Hong Kong’s position as an international center has become more stable.
[Concurrent]Xiao Geng, Chairman of the Hong Kong Institute of International Finance
The central government is very supportive of Hong Kong as an international financial center. Hong Kong has always been exploring the issuance of government bonds, and of course there are more and more of them now. The issuance of treasury bonds, with different maturities and different types, I think are some opportunities for Hong Kong. The RMB market in Hong Kong is very active, because offshore RMB from all over the world will come to Hong Kong. One is to facilitate Hong Kong’s service to the mainland, and the other is to help the internationalization of the renminbi.
[Concurrent]Sheng Zhiwen, Chairman of Hong Kong Lan Kwai Fong Group
Hong Kong has the trust of countries all over the world. Hong Kong has almost all top banks, free flow of capital, close connection between stock market and bond market, and is also the world’s largest offshore RMB settlement center. Because the usage rate of RMB is getting higher and higher. Russia started to use RMB to trade oil, Brazil started to use RMB directly for settlement, more and more countries including Argentina, Saudi Arabia, I think regarding 30 countries are using RMB now, which is very important.
[Explanation]In the face of major changes unseen in a century, keeping pace with the times, reform and innovation have always been the “source of flow” for Hong Kong’s financial market to maintain a strong momentum. Six months ago, Chief Executive Lee Kar-chao pointed out in his policy address that a series of measures would be taken to comprehensively enhance the competitiveness of Hong Kong’s financial services. The first of these measures is to revise the listing rules for the Main Board of the Hong Kong Stock Exchange.
[Concurrent]Li Jiachao, Chief Executive of the Hong Kong Special Administrative Region
Hong Kong Exchanges and Clearing Limited (HKEx) will amend the main board listing rules next year (2023) to facilitate financing for advanced technology companies that do not yet have profit or performance support.
[Explanation]On April 30, the new “Listing Rules” of the Hong Kong Stock Exchange came into effect. This is the biggest reform of Hong Kong’s capital market in the past 25 years following H shares.
[Concurrent]Zhuang Tailiang, Associate Professor, Department of Economics, The Chinese University of Hong Kong
Our rules keep pace with the times. We are constantly in line with international standards. For example, some companies are engaged in medical treatment and biotechnology. They may not have made much profit at the beginning, but they are very promising. Those companies can also be listed in Hong Kong now. As an international financial center in Hong Kong, our number one priority is to attract capital.
[Explanation]With the resumption of “comprehensive” customs clearance with the Mainland at the beginning of the year, the number of tourists visiting Hong Kong has gradually increased, and the willingness to consume in Hong Kong has further improved. Significant improvement, Hong Kong’s economic momentum is improving.
[Concurrent]Zhuang Tailiang, Associate Professor, Department of Economics, The Chinese University of Hong Kong
Retail, catering, and hotels in the unemployment-stricken areas before “clearing the customs” are doing well. You can see that hotels and catering have rebounded by at least 80%, and retail sales have also rebounded by double digits. Therefore, in the unemployment-stricken area, people are back. Financial data also shows that funds have also returned from other places, and the flow of people has also returned, so we are basically moving towards a full return to normal.
Reporter Fan Siyi Liu Xuanting Luo Siyu reports from Hong Kong
Responsible editor:[Li Ji]
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