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Speech by FS at breakfast session on "Hong Kong: the Financial Gateway to China" in Riyadh (English only) (with photos)
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     Following is the speech by the Financial Secretary, Mr Paul Chan, delivered today (October 26) at a breakfast session on "Hong Kong: the Financial Gateway to China" in Riyadh, Saudi Arabia:
 
Mohammed (Executive Chairman, Investcorp, Mr Mohammed Alardhi), Laura (Chairman of Hong Kong Exchanges and Clearing Limited (HKEX), Mrs Laura Cha), Victor (Group Chairman of the Fung Group, Dr Victor Fung), distinguished guests, ladies and gentlemen,

     Good morning.
 
    I'm delighted to be here with you for today's breakfast session jointly organised by the Hong Kong SAR (Special Administrative Region) Government Hong Kong Economic and Trade Office and the Hong Kong Stock Exchange, with the full support of Investcorp.
 
   This is an occasion with special purpose and meaning. It is the first time Hong Kong sends a delegation to join the Future Investment Initiative (FII) here in Riyadh. We are here, for my first overseas visit since the onset of the COVID-19 pandemic for nearly three years, readying to tell our friends in Saudi Arabia, in the Gulf Region and the world, that Hong Kong is flying again, and you are most welcome to work with us to reap the benefits of a bright and hopeful future.
 
    The Middle East remains a fast-growing market despite a challenging global environment. Sweeping pro-business reforms and vision for economic transformation are bringing the region to new frontiers. Consider Saudi Arabia's Vision 2030. Together, they can only fast-track the region's development, providing opportunities for two-way investments.
 
    Since you may not have travelled to Hong Kong for a long time, allow me to take this opportunity to share with you our vision and your opportunities in Hong Kong's financial future.
 
    Hong Kong is already a world class IFC (international financial centre). Our success is firmly underpinned by the "one country, two systems" principle, where we preserve our distinctive status as a capitalist economy with the common law system and fully connecting to the world. President Xi Jinping made clear that this principle is to be here for the long run. It has been officially written into the Constitution of the Community Party at its 20th National Congress as well as the Constitution of the nation as an integral part of the country’s governing system.
 
    Our vision for Hong Kong as an IFC certainly includes the deepening and broadening of our stock market. But allow me to defer this to Laura and Gucho (Chief Executive Officer of HKEX, Mr Nicolas Aguzin) from the HKEX. They will tell you in much greater detail. But let me make a few other points.
 
    RMB (Renminbi) internationalisation. With the growing status of RMB in the world's trade settlement and investment, as well as a reserve currency down the road, Hong Kong is in a unique position in helping RMB internationalisation. Hong Kong is the offshore Renminbi hub which handles over 75 per cent of the world's RMB settlements. We are enriching our RMB ecosystem by rolling out more RMB-denominated investment and risk management products, upgrading our market infrastructure, and broadening the various Connect schemes which provide mutual access between the capital markets of the Mainland and the world.
 
    Then, it is green and sustainable finance. I took the opportunity to elaborate Hong Kong's vision and contributions at yesterday's FII plenary session – which are signified by the vast amount of green and sustainable debts issued or arranged in Hong Kong for the Mainland and other parts of Asia, totalling over US$56 billion. In fact, Mainland municipal governments utilise our platform to issue their first ever green bonds to international investors. We in Hong Kong are setting the standards and benchmarks for green bonds issuers in the region.
 
    Hong Kong is also Asia's prime asset and wealth management centre. We currently manage more than US$4.6 trillion of assets, with two-thirds coming from outside Hong Kong. We are also the largest hedge fund centre in Asia. For private equity, we are the second largest in Asia, second only to the Mainland, with over US$190 billion of assets under management. We are also offering tax concessions for helping family offices to be set up in Hong Kong.
 
    Meanwhile, we are also striving for multinational and Mainland companies to use Hong Kong as the platform for corporate treasury management where MNCs (multinational corporations) can centrally manage their cash, financing, foreign exchange, and other treasury activities. We offer them tax concessions and we are striving to sign more comprehensive double taxation agreement with more jurisdictions to facilitate this development.  
 
    The National 14th Five-Year Plan of our country has positioned Hong Kong as a risk management centre. On the equities and bond side, we have been rolling out new products. The MSCI A50 contracts, Chinese treasury bills future contracts and interest rate Swap Connect are just a few recent examples. Recently, the China Securities Regulatory Commission has agreed to our proposal of including foreign companies listed on our stock exchange in Southbound Connect. In other words, this milestone development will enable overseas companies to tap the huge Mainland capital in an environment, operation and regime-wise, that they are familiar with and trust. This will certainly enhance the liquidity of our market, and consequently provide support to the securities listed on our stock exchange.
 
    Fintech, too, is something which we are embracing. The Hong Kong Monetary Authority is building the Commercial Data Interchange for the banking industry to facilitate the better use of their data they have on a consent basis, to spur innovation. At the same time, we are exploring the use of central bank digital currencies, CBDCs,  for cross-border trade settlement. And a policy paper on virtual assets will also be issued this month.
 
    Ladies and gentlemen, in many different directions, we are stepping up efforts to bring the competitiveness of Hong Kong as an IFC to new heights. This optimistic future is also reinforced by another national policy of our country, that is the development of the Guangdong-Hong Kong-Macao Greater Bay Area. It is an area comprising nine cities including Shenzhen in Guangdong Province, Hong Kong and Macao. Powered by innovation and technology, along with world-class manufacturing, with a per capita GDP (gross domestic product) of about US$22,000, it is a huge consumer market with far-reaching investment opportunities to tap. And it is also a perfect entry to the vast Mainland market. Great news for our asset and wealth management business partners.
 
    With the ample opportunities ahead, the HKSAR Government has transformed our philosophy of governance - striving to be a proactive government serving an efficient market, thereby creating strong impetus for economic growth. For example, to this end, we will establish a Co-Investment Fund, with an initial injection of US$4 billion, to invest in companies with strategic value to Hong Kong or their projects. At the same time, more aggressive talent admission schemes have been rolled out to get the right people to power our economic engine.
 
    Say, for example, graduates from the top 100 universities, altogether 160, because there are different lists. These graduates with three years' experience in the past five years can come to Hong Kong to work. No need for a visa, no need to secure any job beforehand. And for those who do not qualify for the experience requirement, we also welcome them to come although initially we will give them a short-term visa of two years.
 
    Speaking of economic momentum, may I make one remark. Some people and media have been sceptical of our anti-epidemic policies, criticising them as harsh rules that have hampered investments and led to outflow of talents. But please note that since the new Government assumed office in July this year, we have been adopting a science- and evidence-based targeted approach. We have relaxed our inbound measures quite significantly in a short period of time. Now is what we call "0+3", which is basically no home or hotel quarantine at all. This will greatly facilitate business activities while keeping infection risk down.
 
    Ladies and gentlemen, thank you so much for taking time out of your business schedule to join us this morning. If I make an appeal to you, please make a visit to Hong Kong to see for yourselves the opportunities of this revitalised vibrant city. I also wish you good health and the best of business in 2023.
 
    Thank you very much.
 
Ends/Wednesday, October 26, 2022
Issued at HKT 18:55
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Today's Press Releases  

Photo

The Financial Secretary, Mr Paul Chan, is continuing his visit to Riyadh, Saudi Arabia today (October 26, Saudi Arabia time). Mr Chan attended a breakfast seminar jointly organised by the Hong Kong Economic and Trade Office in Dubai and the Hong Kong Exchanges and Clearing Limited. Speaking to some 50 political and business leaders, he said that with the advantages under the “one country, two systems” principle, the financial markets and services will continue to broaden and develop, and bring tremendous opportunities to Middle East enterprises and investors.  He encouraged enterprises in the region to tap into Hong Kong’s financial markets and services and reach out to the Mainland market.
The Financial Secretary, Mr Paul Chan, is continuing his visit programme to Riyadh, Saudi Arabia today (October 26, Saudi Arabia time). Photo shows a panel discussion at a breakfast meeting with panellists including the Chief Executive Officer of the Hong Kong Exchanges and Clearing Limited, Mr Nicolas Aguzin (second right); Co-Chief Executive Officer of Investcorp International Limited Mr Hazem Ben-Gacem (first right); and the Deputy Chief Executive Officer of the Hong Kong Monetary Authority Mr Howard Lee (second left). They shared their insights on how Hong Kong’s financial market is connected to the world.
The Financial Secretary, Mr Paul Chan, is continuing his visit to Riyadh, Saudi Arabia today (October 26, Saudi Arabia time). Mr Chan attended a breakfast seminar jointly organised by the Hong Kong Economic and Trade Office in Dubai and the Hong Kong Exchanges and Clearing Limited. Photo shows Mr Chan exchanging views with participants.