Following is the speech by the Financial Secretary, Mr Paul Chan, at the Belt and Road Summit Business Plenary: Collaborate for a Bright New Era today (August 31):

Peter (Chairman of the Hong Kong Trade Development Council, Mr Peter Lam), Ronnie (Chairman of Hang Lung Properties, Mr Ronnie Chan), Swee Keat (Deputy Prime Minister and Coordinating Minister for Economic Policies of Singapore, Mr Heng Swee Keat), distinguished guests, ladies and gentlemen,

     Good morning. It's a pleasure to join you today for the seventh annual Belt and Road Summit – and this morning's business plenary, "Collaborate for a Bright New Era." I am particularly pleased that this is a physical summit for the first time since 2019. 

     This year is a milestone for Hong Kong, marking the twenty-fifth anniversary of our return to the motherland. In his important speech on July 1 when gracing Hong Kong SAR's 25th anniversary, President Xi Jinping stressed that the "one country, two systems" principle must be adhered to in the long run, and the Central Government fully supports Hong Kong in maintaining our distinctive status and advantages, reinforcing our role as an international financial, shipping and trading centre.

     This has given strong assurance to maintaining our unique role as the key connector between our country and the rest of the world. Together with our distinctive competitive edges, including the common law system and rule of law; a low and simple tax regime; internationally aligned regulatory system; free flow of goods, capital and information; open and business-friendly environment, etc., Hong Kong is, and will remain, a key link for the Belt and Road, where we offer excellent project financing and high value-added professional services.

     As I talk of link and connection, the connectivity of Hong Kong is also self-explanatory: we are the natural base to enter Mainland and Asian markets. We are a central player in the Guangdong-Hong Kong-Macao Greater Bay Area, an integrating, cluster-city economy driven by innovation and technology as well as world class manufacturing capabilities, with a population of 86 million and per capita GDP at around US$20,000. That is a huge consumer market to explore.

     We are also, after all, strategically located at the centre of Asia. Half of the world's population are within five hours of flight time from Hong Kong, with our airport connected to around 220 destinations prior to the COVID-19 pandemic. The Hong Kong Port also maintains marine cargo movements with over 90 countries along the Belt and Road.

     With so many political and business leaders from the Belt and Road and beyond, here today, we have what we need to collaborate and flourish. Of that, I am confident. Please allow me to share a few thoughts on that promising future as we collaborate, and Hong Kong's role in realising it.

     Hong Kong is a world class international financial centre that services the region and the world. For instance, Hong Kong's securities market capitalisation stood at more than US$5.4 trillion in 2021, representing more than 14 times of our gross domestic product (GDP). Total assets of our banking sector reached more than US$3.3 trillion, more than nine times of our GDP. Asset under management was more than US$4.5 trillion, more than 12 times of our GDP, and two-thirds of this were from outside of Hong Kong. Last year, we were Asia's largest and the world's second largest fundraising hub for biotechnology companies. We also came in first in terms of hedge funds in Asia and second in terms of private equity funds. 

     Our mature and efficient financial market as well as prowess of professional services have made Hong Kong a premier financing centre for Belt and Road infrastructure projects. Apart from providing avenues for financing greenfield projects, we are also seeking to develop Hong Kong as a hub that facilitates the flow of capital to high quality brownfield projects. For example, the Hong Kong Mortgage Corporation is working on a pilot scheme on infrastructure-financing securitisation whereby products worth some US$450 million would be offered to institutional investors early next year.

     In recent years, Renminbi is increasingly used in Belt and Road countries for cross-boundary trade settlement. Our offshore Renminbi business has much to offer. Hong Kong already manages the deepest pool of Renminbi liquidity outside the mainland, at over RMB800 billion. We hold, as well, the largest offshore Renminbi bond market, and our banks handle about three-quarters of the world's Renminbi payments. In short, we are ideally positioned to offer a wide range of offshore Renminbi-denominated investment products and channels, as well as treasury-management tools, so as to meet the Belt and Road countries' soaring demands. 

     Environmental, social and governance, or ESG, is another fast-emerging movement we are keen to capitalise on. Since 2018, the Hong Kong Special Administrative Region Government has issued more than US$7 billion in green bonds targeting global institutional investors. These include a 30-year, US dollar-denominated green bond and a 20-year, euro-denominated green bond. Both, by the way, were the first of its kind issued by an Asian government. In 2021, a total of US$31.3 billion of green and sustainable bond was issued in Hong Kong, representing one-third of the Asian market.

     And we are determined to do more. We are keen on building on Hong Kong's role as a risk management centre. We made a number of legislative amendments last year, covering tax concessions for selected insurance businesses, such as marine and specialty insurance; as well as expansion in the scope of insurable risks of captive insurers set up in Hong Kong. The Hong Kong Specialty Risks Consortium established by the Insurance Authority of Hong Kong also facilitates the matching of demand and supply in specialty risk areas.

     Among the many opportunities that Hong Kong could offer to Belt and Road countries, I also want to cover one more aspect. President Xi in his important speech on July 1 has reminded us that our concepts of governance need to be transformed so that a capable government serves an efficient market. As part of our efforts to create strong impetus for growth, we are, capitalising on our strong collaboration with Shenzhen, developing Hong Kong into an international innovation and technology hub, focusing development on life and health sciences, advanced manufacturing, artificial intelligence and data industry, etc. We are also pressing ahead with more local infrastructure projects, including the Northern Metropolis and the Lantau Tomorrow Vision, as well as many other roads, railway and land development projects. Talents, capital and entrepreneurs are all essential to achieving our goals. We warmly welcome businesses and talents from all over the world, Belt and Road countries included of course, to come to Hong Kong to collaborate with us and grasp the enormous opportunities together. To this end, we will have new policies and support measures to facilitate the coming of talents and enterprises.

     Ladies and gentlemen, collaboration, and the connectivity it creates, is at the heart of the Belt and Road Initiative. I am convinced that the many challenges we have faced these past several years will fade, giving way to widespread, wide-ranging, opportunities. A bright new era will emerge. Hong Kong is well positioned to contribute to this great endeavour, by connecting people, companies, investors, countries and economies, with opportunities and prospect through the Belt and Road – and much else.

     Finally, I would like to thank the Hong Kong Trade Development Council for its crucial role in organising this outstanding Summit. 

     I wish you all the best of business, and connectivity, at the Summit and along the Belt and Road. Thank you.

Ends/Wednesday, August 31, 2022
Issued at HKT 13:41

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