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HK forges new direction: FS
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    Hong Kong is forging a new direction that best achieves the goals of enhancing its status as an international business centre and as China's global financial centre, the Financial Secretary, Mr John C Tsang, said at the Wharton Club luncheon today (November 29).

     To attract an ever larger number of overseas companies to list on the stock exchange, Mr Tsang said that the Hong Kong Exchanges and Clearing Limited and the Securities and Futures Commission published in March this year a statement on opening the equity listing regime to overseas issuers.

     "New procedures will also make it easier and quicker for foreign companies to list in Hong Kong," Mr Tsang said.

     Mr Tsang noted that another exciting prospect was bringing Middle Eastern investors to Hong Kong.  "Although Islamic financing is a relatively new venture for Hong Kong, we are actually ideally positioned as a platform for investors looking to capitalise on the Mainland's rapid economic growth.

     "Our stable and freely convertible currency, flexible regulatory regime and world class financial infrastructure and settlement systems make Hong Kong an attractive choice for investors from all over the world, including the Middle East."

     Mr Tsang said that Mainland enterprises had highlighted Hong Kong's potential as a premier capital-raising platform.  "As at the end of last month, 397 Mainland enterprises were listed on the local stock exchange, accounting for a third of the listed companies, and about 60% of market capitalisation."

     Mr Tsang said that the challenge in the next few years would be to fulfill Hong Kong's role as China¡¦s global financial centre and to more closely streamline the two financial systems.

     "First of all, we need to expand the presence of our financial institutions in the Mainland," Mr Tsang said, noting that the free trade agreement with the Mainland, the Closer Economic Partnership Arrangement, was the ideal vehicle to gain greater access to the Mainland market.

     Hong Kong should also play a greater role in the outward mobility of funds from the Mainland. An important avenue for this outward flow of capital was the Qualified Domestic Institutional Investor scheme, or QDII, Mr Tsang said.

     He said that as the two financial systems became more closely linked, there would be greater scope for financial instruments issued in Hong Kong to be marketed to Mainland investors.

     Regarding currency, Mr Tsang said that Hong Kong had been a reliable testing ground for renminbi-denominated transactions since 2004.  In June this year, Hong Kong became the first place outside the Mainland to offer a renminbi bond market.

     "As China's economic stature grows, so will the importance of its currency.  That will in turn encourage the further development of renminbi business here, benefiting both Hong Kong and the Mainland in the long run."

     Mr Tsang added that Hong Kong had a world-class multi-currency settlement system and expected more frequent use of Hong Kong as a platform for outward investment by the Mainland's fund managers, investors and financial institutions.

     On human capital, Mr Tsang said that Hong Kong's long-term prosperity depended largely on the ability of the workforce to constantly upgrade and stay one step ahead of the competition.

     "One thing we are doing to attract more high-calibre individuals to the city is relaxing the criteria for people wishing to apply to join our Quality Migrant Admission Scheme.  By lowering the age limit and adjusting other prerequisites, the scheme will be available to more people from overseas.

     "We are also opening up our tertiary education establishments to more non-local students and making it easier for them to remain in Hong Kong and work after they have finished their studies," Mr Tsang said.

Ends/Thursday, November 29, 2007
Issued at HKT 18:35

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