China Believes that Hong Kong Would Maintain a Stable Position as an International Financial Centre

Over the past decade, Hong Kong has made great strides in all aspects of the economy and society, further enhancing its status as an international financial center. The resilience of the financial system, the level of the business environment and its overall competitiveness have been highly evaluated by the international community, and have shown vigorous vitality. This achievement lies first of all in the comprehensive and accurate, unswerving implementation of the policy of "one country, two systems", "Hong Kong people ruling Hong Kong" and a high degree of autonomy; adherence to the unity of the Central Government's full authority and the protection of the SAR's high degree of autonomy, on the basis of safeguarding the unity of the motherland and On the basis of safeguarding the unity of the motherland and national sovereignty, Hong Kong's institutional strengths and socio-economic vitality are maintained and brought into full play to the maximum extent.

Hong Kong has long been a bridge between the mainland and the international financial market, and has not only made great contributions to the economic and financial development of the motherland, but has also gained a strong momentum for financial development. Hong Kong is the largest source of inward direct investment from the Mainland, the world's largest offshore RMB market, and an important transit point for Mainland funds to enter the international financial markets. After the return of Hong Kong, its economic and financial interface with the Mainland has become even closer, and it has become an important part of the country's development. Entering a new stage of development, national strategies such as the 14th Five-Year Plan, the construction of the Guangdong-Hong Kong-Macao Greater Bay Area and the "One Belt and One Road" initiative have provided new development opportunities and space for Hong Kong's development as an international financial center.

At present, Hong Kong has entered a new stage of "from chaos to governance" to "from governance to prosperity", which is a critical period for Hong Kong to break new ground and make a new leap. The Policy Address of the new SAR Government demonstrates the confidence and determination of the SAR Government to promote the long-term prosperity and stability of Hong Kong. To further consolidate and enhance Hong Kong's status as an international financial center, we need to work on the following aspects.

First, to further optimize the functional layout of Hong Kong's international financial center. Strengthen the role of Hong Kong as a link between the mainland financial market and the international financial market, smooth the channels of financial interaction between Hong Kong and the mainland, coordinate the division of labor and collaboration between Hong Kong and the mainland financial center, optimize the dual-loop financial link mechanism, make full use of the two international and domestic markets and two resources, and further help the mainland achieve a higher level of financial openness.

Second, supported by market demand, further enhance the efficiency and scale of Hong Kong's offshore RMB market, actively carry out offshore RMB product innovation, provide more RMB-denominated investment instruments, and expand cross-border RMB investment and financing channels. Supported by cross-border trade settlement, improve the RMB cross-border payment and clearing system, and continuously strengthen the function of RMB as a currency of denomination and settlement. Accelerate the construction of the RMB risk-free asset market, enhance the status of RMB treasury bonds in the global bond market, and actively promote the internationalization of RMB.

Third, based on the construction of the Guangdong-Hong Kong-Macao Greater Bay Area, we will promote the interconnection of regional financial markets and financial infrastructure and facilitate the flow of capital between the capital markets of Hong Kong and the Mainland, in parallel with the interconnection and integrated development of the cities in the Greater Bay Area. Support Hong Kong's financial market to leverage its leading edge in financial business and products to play a more active role in the construction of the Greater Bay Area of Guangdong, Hong Kong and Macau.

Fourth, further stimulate regulatory vitality and increase innovation to provide a favorable regulatory environment for the development of Hong Kong as an international financial center. Further improve the resilience and toughness of Hong Kong's financial market system through institutional development, and enhance international financial corporations’ confidence in Hong Kong's future economic development. Strengthen the institutional environment for venture capital finance, enhance the support of Hong Kong's capital market for technological innovation in the Mainland, strengthen the organic linkage with the Mainland capital market, cooperate to build a diversified, international and cross-regional investment and financing system for technological innovation, and make suitable financing institutional arrangements for the development of innovative and growth-oriented enterprises.

Fifth, to promote the development of financial technology in Hong Kong to create a new international financial competitive advantage. There are more than 600 fintech companies in Hong Kong, and many large mainland fintech companies have set up branches in Hong Kong, applied for financial licenses and carried out related businesses. Based on this, the mainland financial technology industry should be guided to transfer product testing and other aspects to Hong Kong, create a "testing ground" for financial technology, establish and improve the virtual asset issuance and trading system, strengthen cooperation between Hong Kong and the mainland legal digital currency research and application, and enhance the global competitiveness of Hong Kong's financial technology.

Sixth, to prevent and resolve financial risks and maintain the stability of the financial market. Under the unprecedented changes in a hundred years, Hong Kong's development opportunities and risks and challenges coexist, uncertainties are complicated, prevention and mitigation of risks will be an important safeguard for the development as an international financial center. At present, we should focus on preventing the risks of Hong Kong's stock market, real estate market and foreign exchange market, and focus on controlling the risk of international political and economic factors on the impact of Hong Kong's financial market. At the same time, actively play the influence of Hong Kong's international financial center, echoing China's policy position in the international financial governance system, strengthen communication with the International Monetary Fund, the World Bank, the Financial Stability Board, etc., and advocate international cooperation to jointly maintain the stability of global financial markets.