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Hong Kong resilient as global financial hub: HKMA chief

China2021-08-23

ChinasHongKongSpecialAdministrativeRegion(HKSAR)remainsresilientasaglobalfinancialhubfavoredbyinvestorsandbusinessesfromaroundtheworlddespiteexternaluncertainti

China's Hong Kong Special Administrative Region (HKSAR) remains resilient as a global financial hub favored by investors and businesses from around the world despite external uncertainties and challenges, Hong Kong Monetary Authority (HKMA) Chief Executive Eddie Yue has said. 

Yue told Xinhua in a recent exclusive interview that the HKSAR's financial strength is attributed to the unique advantages from "One Country, Two Systems." 

Under the arrangement, the HKSAR will be able to grasp the opportunities from a rapid-growing Chinese mainland economy and at the same time retains a globally recognized financial system that makes it an effective bridge between the Chinese mainland and overseas markets, he said. 

Yue stressed that the HKSAR has held up well against unfavorable conditions over the past years, including social unrest, so-called U.S. sanctions, and COVID-19. 

Some $50 billion foreign capital flowed into the HKSAR last year, and its stock market was the second largest worldwide. Hong Kong's foreign exchange reserves are abundant, and the linked exchange rate system performs well. The banking system also operates stably with sufficient capital and low risk. 

The International Monetary Fund recently released a report that reaffirmed the HKSAR's position as an international financial center.

According to the World Investment Report 2021 released by the United Nations Conference on Trade and Development, the HKSAR remained the world's third-largest destination for foreign direct investment in 2020. 

Yue believes foreign investors remain optimistic about the region's prospects. 

Thanks to the enactment of the national security law in the HKSAR, stability and tranquility were resumed, which has provided a stable business environment and made financial institutions at ease in the region, he said. 

Some foreign investors were concerned one year ago when the national security law took effect, but now they are only interested in how to seize the emerging opportunities in the HKSAR and the Chinese mainland, especially financial technology and green finance, Yue said. "They actually consider putting more resources and expand business here." 

Looking ahead, Yue believes the HKSAR's financial markets will continue to prosper due to increasing closer ties with the Chinese mainland, citing more opportunities for various financial institutions from banks to asset management companies. 

Currently, about 60 percent of purchases of Chinese mainland bonds and two-thirds of stocks by foreign investors are made through the HKSAR's connect programs, Yue said. 

Yue expects the upcoming southbound trading of Bond Connect and the wealth management connect in the Guangdong-Hong Kong-Macao Greater Bay Area will bring even more impetus to HKSAR's financial system. 

"Despite challenges in the past two years, Hong Kong's financial industry is still stable. Its international financial center status does not diminish but has become even stronger," Yue said, noting that with the strong backing of the Chinese mainland, HKSAR's financial development will continue to be resilient and investors will remain confident.

(CGTN)

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