Transcript of remarks by FS at media session in New York
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Financial Secretary: I guess I will start in English, and then you can ask your questions in your dialect. Well, I came to New York after our meeting in Washington, DC, the meeting of the World Bank and IMF (International Monetary Fund). I have been here for three or four days, and in these few days we have the opportunity of meeting quite a good cross-section of the community, particularly the business, financial community. We've also have had meetings with some of the papers here. So it has been quite a good experience so far. I enjoy that, I always enjoy coming back to New York. It's one of my favorite towns. So here we are.
Reporter: Sandra from Tencent Finance. Two questions about US-Hong Kong economy. First of all, will Hong Kong consider to un-peg US dollars in time soon in the effect (of) rate hike cycle. And second part is, what's Hong Kong strategy to strengthen its financial centre role and take advantage of Renminbi internationalisation…
Financial Secretary: The short answer to the first question is no. We pegged to the US dollars back in 1983, so it has been over some 30 years and we have gone through some pretty rough times, some ups, some downs and so forth. We have gone off quite well. So that's really no intention, no need for us to do that. This is the right mechanism for us and it has worked well. And in terms of the Renminbi internationalisation, we've been doing that for the past ten years. We started off in the modest way, and we have done very well by it. We are now the biggest, we have the biggest liquidity pool in the world, about 750 billion yuan, and that is the pool much larger than the whole world, the rest of the world combined. And in terms of trade settlement using Renminbi, we do about three quarters of the world's business. So all the financial institutions in Hong Kong have done well by the internationalisation process. And we're going to continue. Now the Renminbi has been included in the (basket) of SDR (Special Drawing Rights), I think the demand for Renminbi, the demand for the usage of Renminbi, amount of the transactions will increase. And I think we want to make good use of this opportunity for Hong Kong so that we can do even more in this process, contributing to the well-being of our nation.
Reporter: A quick follow-up. So you think Hong Kong has enough foreign reserve to defend its peg to US dollars…
Financial Secretary: Our Exchange Fund currently has three trillion dollars.
Reporter: How do you think cultural exchange will help business and market development for Hong Kong?
Financial Secretary: I think cultural exchange is a very very important aspect in terms of promoting or enhancing the understanding of people. And when people understand each other better, trade follows, business follows. So that's a very essential part of all of that, the whole equation. So I think for people to get to understand each other is a very important first step, and I would really encourage that.
Reporter: And you think what makes Hong Kong a desirable place for US businesses to ... And what advice do you have for American companies?
Financial Secretary: Hong Kong in many ways is quite familiar to an average American. One of our official languages is English, so it is very easy to communicate. We are a free economy, we have low tariffs, low tax rates, and those are pretty attractive things. And I think our salaries tax is only 15 per cent, and we have no inheritance tax, we have no capital gains tax, we have no GST, VAT, even wine and beer is tax free. It's a pretty attractive environment, so I hope there will be more American companies coming to Hong Kong. In fact there are quite a lot, we have probably the largest American Chamber of Commerce outside of the US and about 90 000 people of American nationality live in Hong Kong. So it is quite a substantial community, so in fact it is already quite an attractive place to many Americans, and so we hope to promote that more and let more people know about Hong Kong that it is indeed a fantastic platform, particularly for the SMEs, to do business with China, to do business with Asia in general.
(Please also refer to the Chinese portion of the transcript.)
Ends/Wednesday, October 12, 2016
Issued at HKT 14:01
Issued at HKT 14:01
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