Hong Kong Financial Secretary Paul Chan Mo-po hosts a press conference on the issuance of retail green bond, Hong Kong, Feb 15, 2022. (PHOTO / HKSASR GOVERNMENT)
The Basic Law provides the important foundation for governance in the Hong Kong Special Administrative Region and confidence for businessmen and international investors towards the city's economic development, Financial Secretary Paul Chan Mo-po said in his Sunday blog.
The finance chief said the flexible arrangement of the “one country, two systems” principle provides unique institutional advantages for Hong Kong to maintain its core competitiveness to become an international law, finance, shipping, trade, and dispute arbitration center in Asia.
Financial Secretary Paul Chan Mo-po said the “one country, two systems” principle provides unique institutional advantages for Hong Kong to maintain its core competitiveness to become an international law, finance, shipping, trade, and dispute arbitration center in Asia
One of the institutional strengths of the “one country, two systems” is the financial market connectivity between Hong Kong and the Chinese mainland, which is supported by the country and is difficult to replicate in other financial markets.
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“We are keen to further enhance the breadth and depth of connectivity program. From Shanghai/Shenzhen-Hong Kong Stock Connect, Bond Connect, Mutual Recognition of Funds and to the ETF Connect that was just announced last Friday, we are rolling these out in a gradual manner that brings new opportunities, and to cement Hong Kong as safe conduit to connect capital and markets of the Chinese mainland and overseas countries,” Chan said.
Hong Kong Exchanges and Clearing in April 2018 revamped the city’s listing regime by permitting listings of biotech issuers that do not meet any of the main board financial eligibility tests; allowing listings of companies with weighted voting rights structures; and establishing a new concessionary secondary listing route for mainland and international companies that wish to secondary list in Hong Kong.
At the end of April, 74 companies had been listed based on the new listing regime, raising over HK$580 billion ($74.35 billion) that accounted for over 44 percent of the total fundraising amount of initial public offering activities in the same period.
“Hong Kong has become Asia’s largest and the world’s second-largest biotech fundraising center,” Chan noted.
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Since 2019, 21 China Concepts stocks had been listed in Hong Kong through a secondary listing or a dual listing, accounting for over 70 percent of the total capitalization of China Concepts stocks listed in the United States.
As at the end of 2020, the total value of the asset and wealth management industry in Hong Kong was HK$34.9 trillion. The total deposits in Hong Kong’s banking system amounts to HK$15.3 trillion. In the stock market, the average daily share trading amount is over HK$150 billion.
The finance chief warned that, as a fully open international finance center, Hong Kong must view the city’s development from the perspective of overall national security and adopt bottom-line thinking to make preparations and plans to mitigate risks.
“We should formulate the sense of all-round development. We should promote a diversified and balanced economy that can elevate the flexibility and resiliency of the economy to deal with growing complexities of the external environment,” Chan said.
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