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Following is the speech by the Financial Secretary, Mr John C Tsang, at the Sydney China Business Forum this morning (November 17):
Lord Mayor (Clover Moore), Dr Michael Spence, Mr Gary Offner, Mr John Robertson, Distinguished Guests, Ladies and Gentlemen,
Good morning.
It is great to be here in Sydney, though I confess I have not seen much yet beyond sunrise, and perhaps a view of the stunning Opera House. I arrived in Sydney late last night from Brisbane. As you know, the Queensland capital hosted the G20 Leaders' Summit in the past two days. As such, I think it is fair to say that Brisbane, over the weekend, was the unofficial capital of the world.
Right now, I would say that Sydney feels a whole lot like the Aussie capital of China business. That is thanks to this prestigious forum, now in its fourth year of highlighting business promises between Australia and Greater China.
China, as Professor Kerry Brown has once said, "is now a country of big statistics." Professor Brown, of course, is Executive Director of the University of Sydney's China Studies Centre, organiser of this forum. "Making sense of it is a tough task," Professor Brown added.
I share his feelings. Which is why, this morning, I am here to focus your attention on how Hong Kong can help Australian businesses and investors to realise the China opportunities, especially following the widely recognised announcement of the FTA between China and Australia.
Thanks to our unparalleled location, our longstanding business connections, our professional knowledge and our deep cultural ties, Hong Kong naturally serves as the bridge between China and the world. We are the single biggest foreign investor in each and every province of China. No other population in the world knows the China markets better than the business people in Hong Kong.
Allow me to update you on Hong Kong's advantages as a springboard for Australian businesses eager to access Mainland China. Let me begin with our strengths as a global financial centre.
Yes, Hong Kong's financial industry has enjoyed robust growth in recent years. We rank first and third, respectively, in the World Economic Forum's Financial Development Index and the City of London's Global Financial Centres Index. We maintain a highly open and internationalised market, and our regulatory regime is aligned with major global markets.
As the region's international financial centre, Hong Kong is naturally the major provider of financial services for businesses in the Mainland. Moreover, we play a unique role in contributing to our nation's financial reform by serving as the laboratory of new reform measures, as well as functioning as the firewall to shield Mainland's nascent financial market from the volatility in the international arena. Our financial co-operation with the Mainland is based on two key principles: bringing mutual benefit to both sides, while ensuring financial stability.
Economic growth, in Mainland China and throughout Asia, continues to attract investment funds from around the world. At the same time, as more and more wealth is created in the region, Asians are looking for investment options beyond the continent. To take advantage of these developments, you need to be in Hong Kong. We bridge international liquidity with Mainland Chinese products, as well as the Mainland liquidity with international products.
And now there is the Shanghai-Hong Kong Stock Connect, which will be launched this very day in Hong Kong, in fact, in few hours' time. Under the programme, investors from Hong Kong, from Australia and from around the world, can now trade from the Hong Kong Stock Exchange the 570 Shanghai-listed shares, directly, for the first time. Mainland China investors, meanwhile, will be able to trade from the Shanghai Stock Exchange the 270 Hong Kong-listed shares directly.
This brand-new initiative brings unprecedented opportunities to the financial world. One senior Western banker recently described it as the single most important development in China's intention to internationalise this market.
The Shanghai-Hong Kong Stock Connect will also accelerate the development of our offshore Renminbi business.
That business began in earnest a decade ago. Today, it is perhaps the most vivid illustration of financial cooperation between Mainland China and Hong Kong.
Over the past 10 years, our offshore Renminbi business has showcased Hong Kong's unique position as the financial super highway between Mainland China and the rest of the world. Through cross-border trade, direct investment and portfolio investment, Hong Kong links offshore and onshore Renminbi markets, promoting the healthy circulation of Renminbi funds.
The lifting of daily conversion limit of 20,000 yuan for Hong Kong residents today will facilitate the development of even more RMB investment and wealth management products.
During the last decade, the offshore Renminbi business in Hong Kong has expanded remarkably. At the end of September, our banks held 1.1 trillion yuan in deposits and certificates of deposit. In the first nine months of this year, Renminbi trade settlement handled by banks in Hong Kong totalled 4.5 trillion yuan. This accounts for about 80 per cent of the total business.
From 2007 to October this year, more than 460 Renminbi bonds had been issued in Hong Kong, with an outstanding amount exceeding 360 billion yuan. In September, the average daily turnover of Hong Kong's RMB Real Time Gross Settlement system amounted to about 800 billion yuan.
Anyway you count it, it adds up to good business, and great promise, for Hong Kong - and Australia, too.
We welcome the development of Renminbi business in Australia. It can only mean wider use of expanded convertibility for the Renminbi. And that will surely open up more business opportunities for companies in Australia, Mainland China and Hong Kong.
We already have in place a means of furthering our Renminbi cooperation. The Hong Kong-Australia RMB Trade and Investment Dialogue was established two years ago. A private sector-led initiative, it was created to promote closer collaboration between Hong Kong and Australia on Renminbi trade settlement and investment, the development of Renminbi banking products and closer Renminbi banking and financial links.
The bilateral group met most recently in May this year, and I am sure that we shall be hearing more from the group in the coming months.
Meanwhile, I can well understand that some of you may be worried that the recent large-scale protests may undermine our competitiveness and your confidence in Hong Kong. Let me assure you that we remain firmly committed to the rule of law and the freedom of expression.
The protests are about the nomination procedure for the Chief Executive election in 2017. The community is divided at this stage. The Government will continue to do our best to bridge the divide, to build consensus consistent with the provision of our constitution. I am confident that Hong Kong people will find a way forward. We have always done that in the past, and we shall do that again this time round.
As to the protest's impact on our economy, frankly, I do not have the relevant data yet to quantify exactly the impact of the protests on our economy. But it is evident that shops, restaurants and hotels in the affected areas have been hurt. The financial services sector has continued to operate in an orderly manner. The Hong Kong dollar exchange rate and interbank interest rates have been stable. And, to date, no abnormalities in the foreign exchange and stock markets have been observed.
Business has by and large been operating as usual. For example, the Wine and Dine Festival, our annual carnival for wine connoisseurs and gourmet lovers was a huge success. The original site was affected by the protests. We decidedly moved the event to the former Kai Tak airport, which featured an equally astonishing view of our famous Victoria Harbour.
In the end, the four-day festival attracted over 190,000 participants, both local residents and tourists from abroad. That represented an increase of 30 per cent over last year's total. This is strong evidence showing the resilience and reliability of Hong Kong and our unfailing commitments to our business partners. I think you would like to know that the Australian contingent, represented by generous amounts of Penfolds Grange, made an impressive showing.
Ladies and Gentlemen, Hong Kong is uniquely well-positioned to play a pivotal role in the internationalisation of the Renminbi since Hong Kong has always been contributing to and benefiting from the Mainland's economic and financial reforms.
With that in mind, we continue to strengthen our market infrastructure and financial offerings. And we continue to work with Mainland authorities to create Renminbi opportunities that will reward us all.
Thank you.
Ends/Monday, November 17, 2014
Issued at HKT 09:56
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