liberalisation
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With China steadily integrating into the global arena in trade, investment and finance, Hong Kong is positioning itself well to make the best of the opportunities that come along with the economic liberalisation and globalisation of Mainland China.
Speaking today (August 23, Ontario time) at the 2005 Economic Outlook/Policy Forum sponsored by the Canadian Association for Business Economics held in Kingston, Ontario, Ms Elley Mao, Principal Economist of the Hong Kong Special Administrative Region (HKSAR), told a group of Canadian economists from the public and private sectors that Hong Kong would stay competitive by reorientating and broadening its role to meet the changing needs of Mainland China.
In a speech entitled "Economic Development and the Outlook for China and Hong Kong", Ms Mao told the 50 forum participants that while Hong Kong had always been a partner to all these changes in Mainland China, it was no longer the exclusive "gateway" to the increasingly open China market, and that Hong Kong was presented with the opportunities and challenges arising from the situation.
"To ensure that Hong Kong can stay competitive and continue to clinch a close partnership relationship with the Mainland in its future economic growth and development, it has to reorientate and broaden its role to meet the changing needs of Mainland China," she said.
While China lacks a well-developed financial system to promote economic diversification, and prudent risk management to ensure financial stability and sustainable growth and development, Ms Mao said that Hong Kong had a sound legal system, well-regulated markets, and good knowledge of modern management principles, as well as international business standards and codes of behaviour. She said that with these advantages, Hong Kong could assist China to establish a more "rule-based" market system to replace the "relationship-based" practice in the past.
With China opening up its service industry, Ms Mao said there was a rising need for more sophisticated financial intermediation services where Hong Kong played a significant role by turning itself into a conduit of "quality" capital to stay competitive and ahead of other foreign investors in China.
"More than 300 Mainland enterprises are listed in the Hong Kong Stock Exchange and they together account for about 30% of the total market capitalisation value. Hong Kong is thus an important fundraising centre for the Mainland enterprises.
"Moreover, listing in Hong Kong put these enterprises under the supervision of the Hong Kong authorities, and indirectly should help improve governance and elevate management standards in these enterprises," Ms Mao explained.
She said the Hong Kong Stock Exchange ranked first in Asia and fourth in the world in terms of capital raised, and about 36% of Hong Kong's stock market turnover was generated by international investors. "It reflects a significant presence of foreign savings in the Hong Kong stock market."
As a financial market, Ms Mao said that Hong Kong offered an unrivalled competitive edge in liquidity, talent, knowledge, international experience, corporate governance, transparency and property rights in Asia. More multinational companies had chosen Hong Kong as their regional headquarters and offices, which now reached more than 3,600.
Being seen by Mainland Chinese enterprises as "a window to the world", Hong Kong's free flow of funds and information, freely convertible currency, and cross-cultural lifestyle are the major attractions to foreign companies and expatriates, concluded Ms Mao.
The two-day forum, entitled "Coming Down the Track – International Financial Influences on Canada's Outlook", examined the key issues relevant to economists involved in forward-looking analysis. It provided an opportunity for Canada's leading economic forecasters and policy analysts to focus on key influences on Canada's international outlook.
The other speakers at the forum included former Governor of the Bank of Canada, Mr John Crow, and Chief Economist of the National Bank Financial, Mr Clement Gignac.
Ms Mao also gave a presentation on the "Latest Economic Developments in Hong Kong" this evening to representatives from different Chinese business associations and leading business Canadian bankers.
Ends/Wednesday, August 24, 2005
Issued at HKT 11:08
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