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Following is the speech by the Financial Secretary, Mr John C Tsang, at the Asian Financial Forum 2015 Cocktail Reception this afternoon (January 19):
Distinguished guests, ladies and gentlemen,
Good evening.
Thank you all so much for joining tonight's Asian Financial Forum cocktail reception. For most of you here, I know it's been a stimulating opening day, together with the 2 400 notable business, finance and government participants from all over the world, and if you're still on playback mode, a few glasses of our duty-free wine will surely help you find the pause button.
We are now standing at the Hong Kong Booth. It's full of facts, figures and insight into Hong Kong's financial services industry. There's some key intelligence here waiting for you, and you may wish to take a glance while pondering what to do next.
I shall just mention one chart at the booth that is worthy of your consideration. It highlights the robust growth of Hong Kong's asset-management industry over the past decade or so. At the end of 2013, the combined fund-management business in Hong Kong had climbed to US$2 trillion, up 27 per cent over the previous year.
And we're working to make it even stronger. Earlier this month, my colleagues briefed our legislators on a proposal to extend the profits tax exemption for offshore funds to private equity (PE) funds.
Indeed, we expect to introduce a Bill on this into our legislature shortly.
For good reason. More than Asia's asset-management hub, Hong Kong is also a key player in regional PE funds. In fact, more than 350 companies here manage PE funds, with the capital exceeding US$110 billion. That accounts for more than one-fifth of Asia's total.
And there's more. Hong Kong's fund-management business specialises in serving global clients. Over 70 per cent of our fund-management business comes from non-Hong Kong investors, and our fund managers invest almost 80 per cent of their clients' funds outside Hong Kong.
With that in mind, we introduced, several years ago, profits tax exemptions for offshore funds. That concession has helped attract new funds to base here in Hong Kong, while encouraging existing funds to continue investing here.
The extension of the profits tax exemption to private equity will broaden our fund-management business, boosting Hong Kong's reputation as a full-service asset-management hub.
That, I'm sure, will bode well with our friends here in asset management, investment and advisory services. It will also expand demand for business consulting, tax, accounting and legal experts in Hong Kong.
We are, let me add, developing the proposal to allow funds to be set up in an open-ended structure. This should encourage even more funds to set up in Hong Kong. And that can only strengthen our fund-creation capabilities.
Ladies and gentlemen, please enjoy this good evening and the full-to-bursting programme at tomorrow's Forum. I wish you all the best of business in 2015, and the future looks pretty good from the vantage point here in Hong Kong, as well as a rewarding Year of the Ram and, if you prefer, Year of the Goat or Year of the Sheep. But hopefully it is not Year of the Sheepish. Any way you look at it, you can't go wrong.
As George Burns once said and I want to leave you with this final piece of wisdom, he said, "I look to the future because that's where I'm going to spend the rest of my life." Thank you, George.
And thank you everyone. Have a good evening.
Ends/Monday, January 19, 2015
Issued at HKT 23:20
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