CE's speech in delivering "The Chief Executive's 2025 Policy Address" to LegCo (6)

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Chapter VI

Consolidate Hong Kong's Status as an International Hub

90. Backed by strong national support and a high degree of global connectivity, Hong Kong is recognised worldwide as an international centre in finance, trade and shipping, as well as in aviation, legal services and dispute resolution. The Government will fully leverage these institutional strengths to consolidate Hong Kong's status as a premier international hub.

(A) International Financial Centre

91. Through sustained efforts of the Government to strengthen our financial system, Hong Kong has reclaimed its third-place position in the Global Financial Centres Index ranking. Building on this momentum, we will harness the asset-reallocation wave of global investors to cement our status as an international financial centre. Our strategy will deepen the equity market, expand a world-class bond market and a vibrant currency market, while advancing the insurance, asset management and wealth management sectors. We will also expedite the development of new growth areas, building a premier international gold trading market, driving the development of fintech, as well as promoting green and sustainable finance.

Continuously Strengthen the Stock Market

92. The Hong Kong stock market has maintained its strong momentum. The Hang Seng Index has risen by over 20% year-to-date, while the average daily turnover has reached $250 billion, nearly double that of last year. At the end of August, the cumulative amount of funds raised through IPOs exceeded $130 billion, nearly six times higher than that of the same period last year, ranking Hong Kong first globally in IPO fundraising.

93. We will leverage the Technology Enterprises Channel to assist Mainland technology enterprises in raising funds in Hong Kong, strengthening financial support for our nation's development as a science and technology powerhouse. We will also optimise the regimes for listing on the Main Board and issuing structured products, consider enhancements to the listing requirements for companies with weighted voting right structures, explore shortening the stock settlement cycle to T+1, encourage more overseas enterprises to seek secondary listing in Hong Kong, support China Concept Stock companies to return from overseas markets, with Hong Kong as their preferred destination, and press ahead with the inclusion of an RMB trading counter under Stock Connect's Southbound trading for Hong Kong stocks.

Build a World-leading Bond Market

94. The Government will further consolidate Hong Kong's position as a bond market hub. Relevant measures include:

(i) Enhance financial infrastructure, including the collaboration between the HKMA's CMU OmniClear and the HKEX to explore centralised management and the cross-collateralisation of assets (such as shares and bonds) by investors on a single platform, with a view to fostering interplay between various mutual-market access mechanisms, establishing connections with markets such as Switzerland and the United Arab Emirates and promoting the use of offshore Chinese Government Bonds as collateral in different clearing houses to further enrich the use cases of RMB assets. The Securities and Futures Commission (SFC) is also studying the feasibility of an innovative electronic bond-trading platform built and operated by market participants. It is also promoting the establishment of a commercial repo market and a central counterparty regime in Hong Kong to improve market liquidity.

(ii) Continue discussions with relevant Mainland institutions on introducing offshore treasury bond futures in Hong Kong, expand the variety of interest rate derivatives under Swap Connect, promote the development of over-the-counter derivatives, and explore the launch of the cross-boundary RMB repo business in collaboration with the Mainland in due course.

(iii) Step up market outreach efforts by the SFC, the HKMA and the HKEX to encourage more enterprises to issue corporate bonds in Hong Kong, attracting capital from around the globe to participate in our bond market.

(iv) The SFC and the HKMA will set out relevant details of these measures in the Fixed Income and Currency Roadmap to be published.

Build a Vibrant Currency Market

95. Hong Kong is the world's largest offshore RMB business hub. To enhance the liquidity and global reach of the offshore RMB market in Hong Kong, the HKMA will make use of the Currency Swap Agreement with the People's Bank of China and introduce an RMB Business Facility, providing enterprises with the longer-term RMB financing required for trade, daily operation and capital expenditure, so as to support the use of RMB in the real economy. It will also continue to explore diversified channels for cross boundary capital acquisition, so as to provide a stable source of RMB funds for the market at a relatively low cost. The HKMA will also explore measures to facilitate foreign exchange quotations and transactions between RMB and other regional currencies in Hong Kong.

96. The Government will issue more RMB bonds and consider settling government expenditure in RMB under suitable circumstances.

Expedite the Building of an International Gold Trading Market

97. I have accepted the recommendations of the Working Group on Promoting Gold Market Development. The FSTB will implement the relevant initiatives, including:

(i) Support the Airport Authority Hong Kong (AAHK) and financial institutions to establish Hong Kong's gold storage facilities, with a target gold storing capacity of over 2 000 tonnes in three years, propelling Hong Kong into a regional gold reserve hub.

(ii) Encourage gold traders to set up or expand refineries in Hong Kong, and explore with the Mainland the feasibility of processing supplied materials in the Mainland to produce refined gold for exporting to Hong Kong for trading and delivery.

(iii) Establish a central clearing system for gold in Hong Kong to provide efficient and reliable clearing services for transactions of gold in compliance with international standards, and invite the participation of the Shanghai Gold Exchange to prepare for mutual market access with the Mainland in the future.

(iv) Offer a greater variety of gold investment vehicles by assisting issuers in issuing gold funds, and support the development of new investment products such as tokenised gold.

(v) Support the setting up of a trade association for the gold industry, with a view to establishing an exchange platform with the Government and regulators, stepping up promotional efforts and attracting more B&R clients, while strengthening talent training.

98. The International Board of the Shanghai Gold Exchange has set up its first offshore delivery vault in Hong Kong and launched new contracts for delivery in Hong Kong. We will continue to promote co-operation between the gold markets of the two cities.

International Risk Management Centre

99. To encourage the participation of insurance funds in infrastructure financing, the Government will amend the legislation next year to lower capital requirements for infrastructure investment and provide concessions for local projects. We will also promote the development of exclusive captive and reinsurance business in Hong Kong, encouraging the market to introduce more insurance products such as those related to cross-boundary elderly care, cross-boundary driving and low-altitude economy.

International Asset and Wealth Management Centre

100. Hong Kong is expected to become the world's largest cross-boundary wealth management centre in the next few years. Following the launch of Cross-boundary Wealth Management Connect 2.0 in February last year, the number of Mainland accounts investing in Hong Kong's wealth products has increased from 25 000 to 110 000.

101. We will further enhance the preferential tax regimes for funds, single family offices and carried interest to attract more funds to establish a presence in Hong Kong. The SFC will actively promote the inclusion of real estate investment trusts (REITs) under mutual market access to increase the liquidity of REITs in the Mainland and Hong Kong. We will also facilitate the enhancement of the Qualified Foreign Limited Partnerships (QFLP) mechanism, in particular by collaborating with Qianhai and Shanghai to attract more foreign capital to the Mainland's private capital market. The HKIC will nurture local private equity and hedge fund institutions with good potential through direct or co investment.

102. Currently, applicants of the New Capital Investment Entrant Scheme are required to invest at least $30 million in Hong Kong. Among such investments, the maximum amount of investment in real estate (both residential and non-residential) to be counted towards the scheme is $10 million. The scheme will be enhanced, raising the maximum amount of investment to be counted from $10 million to $15 million for the purchase of non residential properties with no transaction price threshold; as for the purchase of residential properties, the investment to be counted will continue to be capped at $10 million, but the transaction price threshold will be lowered from $50 million to $30 million.

Steady Development of Fintech

103. The HKMA will continue to take forward Project Ensemble⁷, including encouraging commercial banks to introduce tokenised deposits, and promoting live transactions of tokenised assets, such as the settlement of tokenised money market funds with tokenised deposits. It will also assist the Government in regularising the issuance of tokenised bonds, and encourage banks to strengthen risk management through the supervisory sandbox.

104. We are implementing a regime for stablecoin issuers and formulating legislative proposals regarding licensing regimes for digital asset dealing and custodian service providers. The SFC is studying the possibility of offering a wider range of digital asset products and services to professional investors with the prerequisite of sufficient investor protection in place. Meanwhile, we will step up international tax co-operation to tackle cross-border tax evasion. The SFC will also introduce automated reporting and data surveillance tools to build a line of defence against risks associated with digital assets in Hong Kong.

Development of Green and Sustainable Finance

105. In 2022, the HKEX launched Core Climate, an international carbon trading platform and the only voluntary carbon credit trading platform in the world offering settlement in Hong Kong dollars and RMB. In the future, we will deepen pilot co-operation with the GBA carbon market, testing the means of cross-border trade settlement, and jointly building a regional carbon market ecosystem. Working with relevant Mainland regulatory departments and authorities, the Government will also study issues surrounding the country's participation in the international carbon market, including the formulation of voluntary carbon credit standards and methods, as well as the registration, trading and settlement of carbon emission reduction.

(B) International Trade Centre

106. Trading is the second-largest industry in Hong Kong after finance, contributing 15% of the Gross Domestic Product (GDP). Last year, the value of trade was 3.6 times that of the GDP, ranking third in the world. The total value of external merchandise trade also grew strongly by 7.3%, underlining the global market's confidence in Hong Kong as a trade centre.

107. As the evolving geopolitical landscape has disrupted existing supply chains, we will actively open up new markets, promote digital trade, and support the transformation and upgrading of SMEs.

Deepen International Economic and Trade Networks

108. Our investment agreement negotiations with Qatar largely concluded in mid-2025. We will explore the signing of new investment agreements with Saudi Arabia, Bangladesh, Egypt and Peru. The Government will also continue to seek accession to the Regional Comprehensive Economic Partnership (RCEP) to expand our economic and trade network.

109. I will establish an Economic and Trade Office (ETO) in Kuala Lumpur this year to deepen economic and trade promotion in the Association of South East Asian Nations (ASEAN) and neighbouring countries, and will also expand the ETO coverage to Latin America and Central Asia.

Promote Digital Trade

110. The Government will promote the digitalisation of trade to lower costs and improve efficiency. Relevant measures are as follows:

(i) The HKMA will develop a roadmap for Project Cargoˣ ⁸ by the end of the year. Through Commercial Data Interchange (CDI), and working with the AAHK and the Port Community System, the trial project will leverage cargo data to reduce credit costs and processing time for banks and SMEs.

(ii) The HKMA will explore cross-boundary financial collaboration with the Shanghai Municipal Bureau of Data and other parties under Project Ensemble, such as the application of tokenised electronic bills of lading, as well as advancing connections with CDI and Cargoˣ to facilitate trade finance with the use of cargo data.

(iii) A logistics provider will be recruited as an additional pilot participant of the Cross-boundary Express Cargo Clearance Facilitation Arrangement (CEFA) to enhance the efficiency of e-commerce shipment.

(iv) The Trade Single Window will be expanded progressively to cover more trade documents. In parallel, the Government, together with the Mainland's General Administration of Customs, will work to connect the single windows of Hong Kong and the Mainland, and explore the feasibility of extending the existing "Single Submission for Dual Declaration" Scheme to include other trade documents and transport modes. In addition, the Government will discuss the possibility of connecting the single windows with ASEAN.

(v) The Government will introduce a legislative proposal next year for the digitalisation of business-to-business trade documents.

Promote Commodity Trading

111. We will continue to follow the direction set out in the last Policy Address to foster the development of a commodity trading ecosystem in Hong Kong. Relevant measures include:

(i) Support the sector in setting up more approved warehouses, having obtained the approval of the London Metal Exchange, a wholly-owned subsidiary of the HKEX, on the establishment of eight delivery warehouses in Hong Kong.

(ii) Provide half-rate tax concessions for commodity traders to set up businesses in Hong Kong, driving demand for shipping and professional maritime services. Legislative amendments will be made in the first half of next year.

(iii) Enhance the process of international commodity trading through financial innovation, including testing the use of technologies like electronic bills of lading and tokenised deposit in a collaboration between the HKMA and Banco Central do Brazil to facilitate trade.

(iv) Deepen connections with the Guangzhou Futures Exchange and other commodity markets in the Mainland, contributing to the internationalisation of our country's commodity market.

112. The Government will set up the Strategic Committee on Commodities, led by the Financial Secretary. It will bring together industry representatives with the aim of strengthening the top-down design and long-term strategy of our commodity policy.

⁷ Project Ensemble seeks to support the development of the tokenisation market in Hong Kong. Through sandbox experiments, it allows industry participants to explore building the next-generation financial infrastructure with blockchain technology in actual business scenarios.

⁸ Project Cargoˣ is a public-private collaboration launched by the HKMA, focusing on leveraging cargo data to streamline and enhance trade finance processes; developing digital solutions to improve accessibility to trade finance for SMEs; and exploring connections with international data partners to facilitate the trade financing use case for banks in Hong Kong.

(To be continued.)

Ends/Wednesday, September 17, 2025
Issued at HKT 12:10

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