Hong Kong's financial edge stems from 'one country, two systems', says financial chief Paul Chan

The harbour skyline is seen during sunset in Hong Kong, China on Oct 18, 2019.
The harbour skyline is seen during sunset in Hong Kong, China on Oct 18, 2019.PHOTO: REUTERS

HONG KONG (XINHUA) - Financial Secretary of China's Hong Kong Special Administrative Region government Paul Chan on Sunday (Nov 10) reiterated the role of the "one country, two systems" in keeping financial advantages of Hong Kong, which is grappling with prolonged social unrest.

Mr Chan said in an article published on his official blog that investors' confidence has not been affected to a certain degree, citing a stable Hong Kong dollar, free capital flows, no major capital flight, a smooth banking system, and abundant liquidity.

The Hang Seng Index closed at 27,651 last Friday, up from 26,900 at the end of May, largely keeping similar fluctuations with overseas markets, Mr Chan said.

He attributed the stable performance mainly to the principle of "one country, two systems".

Apart from measures by the Hong Kong government, "most importantly, Hong Kong was able to maintain its unique advantage and competitiveness under the framework of the 'one country, two systems'," Mr Chan said.

The nation has brought about enormous opportunities to the Hong Kong Special Administrative Region and firmly support its development, Mr Chan said.

The capitalisation of Hong Kong's stock market is 11 times the GDP, and total banking assets equal to nine times the GDP, which depends on the funds, enterprises and investors from the the global and in particular Chinese mainland, Mr Chan said.

He added that more opportunities will come from the further connectivity between stock and bond markets and fund products between the mainland and Hong Kong.

Financial cooperation in the Guangdong-Hong Kong-Macau Greater Bay Area was highlighted at a meeting of the leading group for developing the Guangdong-Hong Kong-Macao Greater Bay Area last Wednesday.

 
 
 
 

At the meeting, measures were announced to help Hong Kong and Macau residents use mobile payment in the Greater Bay Area and open cross-border bank accounts more easily, as well as promote cross-border wealth management and insurance.

Mr Chan noted that the new policy on cross-border wealth management will generate opportunities for asset management companies and banks in Hong Kong and drive huge demand for financial and other professional services.

He pointed out that more global asset management companies and financial institutions will set up offices or increase investment in Hong Kong.

"That will help further reinforce Hong Kong's position as a international asset management centre and a global hub of off-shore renminbi business," he said.

However, Mr Chan still warned that the challenges posed by violent acts in recent months to social order and safety in Hong Kong makes investors worried and called for an end of violence to create a peaceful environment for Hong Kong's financial development.