Official introduces new measures for strengthening HK-mainland financial connectivity at Beijing forum
Hong Kong is going to take a number of measures to strengthen financial connectivity with the Chinese mainland, including studying the launch of government debt futures in overseas markets and introducing a renminbi counter for HK stocks, a Hong Kong official disclosed at a sub forum of the Financial Street Forum 2022, an annual event widely viewed as the bellwether of China's financial reform and opening-up.
The sub forum, which was held on Tuesday afternoon, focused on new development trends in the yuan's internationalization.
Christopher Hui Ching-yu, secretary for financial services and the treasury of HKSAR, said at the forum that HK will try to enrich the ecosystem of products involving financial connectivity with the Chinese mainland.
In terms of stocks, he said that HK is actively pushing the move to introduce qualified overseas companies into Hong Kong's stock connect program with the mainland, so that mainland investors can purchase shares in overseas companies listed on the HK stock market through the stock connect channels.
Hong Kong is also planning to introduce a renminbi stock trading counter for the southbound leg of Hong Kong's stock connect mechanisms with the mainland, so that mainland investors can trade Hong Kong stocks directly in yuan, he said.
Along with the launch of the yuan counter, Hong Kong will also roll out a relevant mechanism to ensure its liquidity, said Hui.
Other financial products that Hong Kong officials are mulling launching include government debt futures in overseas markets, which Hui Ching-yu said would be a good tool for global investors to manage risks.
All those measures are targeted at further consolidating Hong Kong's position as an all-round offshore renminbi assets and risk management center, he noted.
The official also disclosed that Hong Kong will take measures to support the yuan's internationalization to consolidate Hong Kong's role as an offshore renminbi hub, such as amending laws to expand the exemption range of profits tax to encourage mainland local governments to issue debt in Hong Kong.
"For us at HKEX, the most exciting part of the [China growth] story is what we call the Big Bang of Finance, a process where reforms, connectivity, innovations and two-way capital flows between China and the world will increase the size of China's capital markets to more than $100 trillion over the next decade," Nicolas Aguzin, chief executive of Hong Kong Exchanges and Clearing (HKEX), said Tuesday during a panel session of the Beijing forum.
"Hong Kong is ideally positioned to facilitate this growth as a super connector between East and West," he continued.