SFST's opening remarks at Finance Chapter of Belt and Road Summit (English only) (with photo)
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Ladies and Gentlemen,
Good morning.
This year marks the 10th anniversary of the Belt and Road Initiative - a significant milestone that vividly demonstrates the enduring vision and unwavering commitment of all participating countries and regions.
Finance Chapter
This year's Belt and Road Summit features a Finance Chapter for the very first time, recognising the crucial role that finance plays in driving the success of the Belt and Road Initiative. The Finance Chapter provides us with a platform to address and exchange views on the tremendous opportunities associated with financing projects along the Belt and Road, with topics covering capital raising, energy transition, green technology as well as fintech. This underscores the importance of collaboration and innovation in the financial sector as we forge ahead towards a more prosperous future.
Hong Kong's advantage in financial services
Hong Kong, with its robust financial ecosystem, is uniquely positioned to contribute to the Belt and Road Initiative. As a premier international financial centre, we possess a mature and efficient market, a wide range of financial products and services, and a wealth of expertise in infrastructure financing, risk management, and green finance. Our participation in the Belt and Road Initiative enables us to showcase Hong Kong's strengths and explore new opportunities for collaboration with financial institutions from around the world.
An exemplary illustration lies in infrastructure financing. As infrastructure development gains momentum within the Belt and Road region, enterprises can turn to Hong Kong for diverse avenues of capital raising and financing. Hong Kong, renowned as Asia's leading bond market, offers a range of options such as initial public offerings, post-listing arrangements, bond issuance, and bank loans. In fact, as highlighted by the International Capital Market Association (ICMA), counting in terms of bonds issued internationally by Asia-based entities, the volume arranged by Hong Kong ranked first globally for seven consecutive years since 2016, exceeding US$100 billion and capturing 30 per cent of the market in 2022. To foster greater participation from investors and fundraisers from the Mainland, Asia, and the Belt and Road region in Hong Kong's bond market, the Government has implemented a series of measures to enhance its competitiveness. These initiatives include attracting enterprises to issue bonds in Hong Kong, promoting investor engagement, and expanding the market for green and sustainable finance. Notably, the Qualifying Debt Instrument Scheme has been expanded to encompass a wider range of debt instruments, enabling enterprises investing in bonds issued in Hong Kong to enjoy enhanced tax benefits.
With expanding utilisation of Renminbi (RMB) in bilateral trade and investment, Belt and Road-related countries and regions can capitalise on Hong Kong's prominent role as the global offshore RMB business hub. As at end June 2023, the RMB deposits in Hong Kong was about RMB1 trillion, establishing it as the largest offshore RMB pool worldwide.
We are endeavouring to attract corporations in the Belt and Road countries and regions to set up corporate treasury centres (CTCs) in Hong Kong. We have also been making efforts in sharpening our competitive edge on asset and wealth management, such as diversification of fund structures including the open-ended fund company and limited partnership fund regimes, a re-domiciliation mechanism for foreign funds to migrate to Hong Kong, provision of a more facilitating tax environment and attracting family offices to set up and operate in Hong Kong. These measures are all conducive to attracting global capital to Hong Kong, strengthening our position as a premier asset and wealth management centre, and supporting the fundraising and investment needs of the Belt and Road Initiative.
As a leading green bond centre in Asia, Hong Kong offers a high-quality green financing platform for issuers from the Belt and Road countries and regions. We welcome and encourage more green enterprises and projects to use the financing platform in Hong Kong. We are also committed to promoting market development. Since the establishment of the Government Green Bond Programme in 2018, we have so far issued government green bonds totalling an equivalent of about US$22 billion, establishing important market benchmarks. We have also launched a subsidy scheme to support bond issuers to make green bond issuances and certifications in Hong Kong. To further enrich the green finance ecosystem in Hong Kong and align with international standards, we have been working with financial regulators and stakeholders on developing a green classification framework and strengthening sustainability disclosures. On the other hand, Hong Kong Exchanges and Clearing Limited launched a voluntary carbon trading platform, Core Climate, last year, on which eligible participants can trade voluntary carbon credits to neutralise or compensate for the buyers' carbon emissions. Corporations in the Belt and Road countries and regions can surely make use of this platform to trade high-quality voluntary carbon credits and facilitate capital flow to green projects.
Middle East and ASEAN
I was lucky enough to join the Chief Executive on his significant visits to the Middle East and ASEAN (Association of Southeast Asian Nations) earlier this year. These places share a pivotal role within the Belt and Road Initiative and present numerous opportunities for collaboration and growth. Hong Kong, renowned for its world-class financial infrastructure and professional services, stands ready to provide one-stop solutions for countries and regions along the Belt and Road to attract international capital to support their projects and development. Together, we can forge strong partnerships and leverage our respective strengths to drive sustainable economic development along the Belt and Road.
Yesterday, a Memorandum of Understanding (MOU) was signed between the Financial Services and the Treasury Bureau of the Hong Kong Special Administrative Region Government and the Department of Economy and Tourism of Dubai. This MOU aims at fostering financial collaboration between Hong Kong and the Emirate of Dubai and signifies the closer bonding between these two places in the fields of family office, fintech, virtual assets and green finance, and enhance knowledge exchange among the two markets.
Tax
Not only is Hong Kong keen to contribute to the Belt and Road Initiative in the area of financial services, but also eager to strengthen collaboration with other Belt and Road economies in terms of tax co-operation. This will minimise tax compliance costs and facilitate cross-border trade and investment, thereby fostering closer bilateral and multilateral economic relations with Belt and Road countries.
We do take pride in Hong Kong's commitment to enhancing tax co-operation and promoting exchanges and collaboration in tax matters on both regional and international fronts. Taking this opportunity, I am excited to share with you all that as a founding member jurisdiction of the Belt and Road Initiative Tax Administration Cooperation Mechanism (also known as BRITACOM) established in 2019, Hong Kong is going to host the 5th Conference of the Belt and Road Initiative Tax Administration Cooperation Forum in September next year. Through the conference, we will provide a platform to facilitate effective dialogue on tax co-operation and capacity building among more than 30 tax administrations, as well as other interested parties including international organisations, academic institutions and businesses supportive of the Belt and Road Initiative. This will enshrine Hong Kong's role as a key functional platform for the Belt and Road Initiative and allow us to contribute to the building of a sustainable tax environment.
It is our great pleasure to host this meaningful event next year in Hong Kong and we look forward to extending our hospitality to our friends in the Belt and Road markets.
I hope today's sessions in this Finance Chapter will provide valuable insights to all of you in seizing the opportunities that lie ahead and harnessing the power of financial services to maximise the potential of the Belt and Road Initiative.
Thank you very much.
Ends/Thursday, September 14, 2023
Issued at HKT 15:57
Issued at HKT 15:57
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