Speech by FS at Hong Kong Academy of Finance Fellowship Conferment and Financial Leaders Programme Graduation Ceremony (English only) (with photos)
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Eddie (Chairman of the AoF and the Chief Executive of the Hong Kong Monetary Authority (HKMA), Mr Eddie Yue), Norman (Fellow of AoF Dr Norman Chan), Professor Chen (Fellow of AoF Professor Edward Chen), David (Fellow of AoF Dr David Wong), Elsie (former Secretary for Justice Ms Elsie Leung), distinguished guests, ladies and gentlemen,
Good afternoon. It's a great pleasure to join you today on this auspicious occasion.
Congratulations to Norman, Edward, and David, each a formidable force in finance in their respective areas. The three will be conferred as Fellows of the Academy of Finance - a welcome recognition of their laudable, and longstanding, contributions to finance and Hong Kong's international standing in the sector.
My heartfelt congratulations also go to the inaugural cohort of the Academy's Financial Leaders Programme, including 19 senior professionals who graduated after nine months of intensive programme.
People and knowledge are important drivers of financial services. A rich talent pool and a strong research base are therefore essential ingredients for the success of a leading IFC (international financial centre). This is also the reason why we set up the Academy in 2019.
As the Honorary President of the Academy, I am glad to see that the Academy has made good progress, both in leadership development and in research, notwithstanding the prolonged difficulties posed by COVID-19 on its operations. I was told that the Academy had organised around 130 conferences, seminars and events, large and small, as well as issued around 100 reports and research papers over the past three years or so.
The need for financial talents has become more imminent as the financial world is undergoing rapid changes. For example, ESG (environmental, social and governance), green and sustainable finance, fintech, virtual assets (VAs), etc, have now become new growth areas. These call for continuous enhancements to our talent development.
But where talent development needs to move with the times, so does our IFC as a whole.
Speaking of changing times, I think we must wake up to the reality that over the past few years, the world has become tremendously different from what we previously knew.
Not only have we been hit by the pandemic, but the world has become more divided, polarised, tainted with de-globalisation, geopolitical tensions, populism and protectionism. Competition among different economies for markets, investment and talent has also become very keen.
In face of changes and challenges, we need to stay vigilant. It is important that we reinforce our strengths and shore up our shortcomings, and continuously enhance our competitiveness.
Over the past few years, we have been working industriously to, if I may so call it, "re-invent" our IFC status so that we would stay at the forefront of competition. We are heading to a number of key directions and achieved some good progress. Please let me highlight them here.
First, diversifying our fundraising platforms. Since 2018, we have implemented a series of reforms to turn Hong Kong into a deeper and broader fundraising platform, covering emerging and innovative companies, China concept stocks, SPACs (special purpose acquisition companies), etc. We continue to introduce reforms, like seeking to enable the listing of major companies engaged in research and development in specialised technology areas; and to revitalise the GEM (Growth Enterprise Market) Board. Meanwhile, our bond market has achieved remarkable success, and Hong Kong has become Asia's No. 1 in terms of arrangement of international bonds.
Second, deepening the Connect Schemes and assisting in RMB (Renminbi) internationalisation. As China's IFC, Hong Kong plays an important connector role in the opening up of the Mainland's capital markets. Over the past few years, we have continued to deepen and expand the Connect Schemes, and have provided our markets with unique and tremendous development opportunities. It also helped the internationalisation of the RMB. We are seeking to build a more vibrant offshore RMB ecosystem, offer more RMB-denominated investment and risk management tools, and upgrade our market infrastructure. Thanks to proposals from Joseph Yam and Professor Lawrence Lau who are here with us today, with the support of PBOC (People's Bank of China) and CSRC (China Securities Regulatory Commission), we are moving towards setting up an RMB trading counter for shares trading on our Stock Exchange.
Third, developing green and sustainable finance. We have set out a vision to become a premier centre for green and sustainable finance that serves the green transformation in the Mainland, the region and the world. We have achieved remarkable progress: green and sustainable debts issued or arranged in Hong Kong reached US$56.6 billion in 2021, bringing us first in Asia.
Fourth, asset and wealth management centre. In 2021, we managed more than US$4.5 trillion of assets, with two-thirds coming from outside Hong Kong. We are also the largest hedge fund centre and the second largest private equity centre in Asia.
Fifth, corporate treasury and risk management centres. We want more Mainland and multinational corporations to set up corporate treasury centres in Hong Kong to manage their intra-group financing. We have already introduced tax concessions for corporate treasury activities. We are actively seeking to sign comprehensive double taxation agreements with more jurisdictions. For insurance, we have provided tax concessions for selected insurance business, such as marine and specialty insurance, as well as captive insurers set up in Hong Kong.
Sixth, development of fintech. We continue to cultivate a facilitating environment for financial innovation. Hong Kong now has a vibrant fintech ecosystem with over 800 fintech companies. Under the HKMA's "Fintech 2025" strategy, we have also rolled out the Commercial Data Interchange. We are also working with a number of central banks on a multiple central bank digital currency bridge project.
Reckoning that virtual assets are unstoppable new financial innovations, we seek to embrace them. We issued a policy statement on VAs in October, aiming to establish a comprehensive regulatory framework that will strike a right balance between promoting innovation and setting up guardrails against the risks. We will soon put in place a licensing regime for VA service providers by legislation.
Ladies and gentlemen, continuous development of the IFC requires a critical review of our progress from time to time, identifying challenges and opportunities ahead, and constantly seeking to enhance our regulatory regimes and harness support from various stakeholders. In relation to this, I would appeal to you for advice on a number of areas, including:
- Are there any other areas that we should work on to elevate our status as an IFC?
- How can we provide support to individual sectors of financial services to facilitate their better development?
- What preparations and work should we do to further tap the opportunities of the continuous opening of our country's financial markets, and contribute to RMB internationalisation?How can we better play the role as the connector between the capital markets of the Mainland and the world?
- With changing geopolitical situations, monetary policies of major central banks and mega economic trends, what are the risks ahead? And how can we seize the opportunities?
These are just some of the questions that we in the Government have been contemplating. And I look forward to your wise counsel as you all are captains of industry.
My congratulations once again to the new Fellows and to the graduates of the Financial Leaders Programme.
Ladies and gentlemen, as Christmas and New Year are around the corner, I wish you all a happy festive season, and all the best of business and health in 2023. Thank you.
Ends/Wednesday, December 14, 2022
Issued at HKT 20:22
Issued at HKT 20:22
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