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Hong Kong and Shanghai as IFC 2020 Lions Club of Metropolitan Hong Kong Luncheon Meeting

Hong Kong and Shanghai as IFC 2020 Lions Club of Metropolitan Hong Kong Luncheon Meeting. Julia Leung Under Secretary for Financial Services and the Treasury 24 September 2009. Chinese State Council’s decision.

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Hong Kong and Shanghai as IFC 2020 Lions Club of Metropolitan Hong Kong Luncheon Meeting

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  1. Hong Kong and Shanghai as IFC 2020Lions Club of Metropolitan Hong Kong Luncheon Meeting Julia Leung Under Secretary for Financial Services and the Treasury 24 September 2009

  2. Chinese State Council’s decision • State Council announced on 25 March 2009 a decision to speed up Shanghai as an IFC by 2020 in tandem with the national economic strength and international status of RMB • “到2020年，將上海基本建成與中國經濟實力和人民幣國際地位相適應的國際金融中心”

  3. Chinese State Council’s decision …cont’d • National Development and Reform Commission also released the Pearl River Delta Reform Development Plan “珠三角地區改革發展規劃綱要2008-2020” • Improved ties between Mainland and Taiwan

  4. Challenges and Opportunities Challenges • Marginalisation of HK as IFC • Policy bias that favours Shanghai Opportunities • More relaxation means more businesses for all IS IT A ZERO SUM GAME?

  5. Indicators of Hong Kong as an International Financial Centre

  6. Hong Kong’s Strengths as an International Financial Centre Hong Kong Rich Pool of Professionals Sound Supervision and Risk Management System The World’s Freest Economy Fair Business Environment characterised by the Common Law System and an Independent Judiciary Having the Mainland as our Hinterland Language and Culture; Quality of Life 匯聚大量專業人士 Open Market with High Level of Foreign Investment and Free Flow of Capital Commercial Infrastructure

  7. Hong Kong as China’s IFC • China has a unique advantage, having two financial centres to support its rising economic strength • HK plays strategic role as laboratory for Mainland’s pilots on capital account liberalisation and RMB internationalisation - raising funds for Mainland enterprises - managing Mainland’s growing private and institutional wealth (QDII funds) • HK and Shanghai to complement each other in development as IFC • Increasing financial integration with Pearl River Delta Region

  8. Hong Kong – Equity Fund Raising Centre • The world’s 7th and Asia’s 3rd largest stock market in terms of market capitalisation. • As at end July 2009, the total equity funds raised through initial public offerings so far this year was about HK$27.5 billion, ranking 2nd in the world. • During 2003 to 2008, a total of 405 enterprises raised HK$1014.2bn in IPO in HK, the amount being the 6th largest globally. Of these enterprises, 26.7%(108) were Mainland enterprises, accounting for 68.3% of the total equity funds raised. • Mainland stocks account for 55% of HK exchange’s market capitalization with three of the world’s largest stocks listed.

  9. Hong Kong – A Leading Asset Management Centre • Combined fund management business amounted to US$1,235 billion (HK$9,631 billion) in 2007, representing a growth of 56.5% compared with 2006. Over 68% of the combined fund management business in Hong Kong is sourced from overseas • The turnover of exchange-traded funds for 2008 hit a record high of HK$1,800 million, showing a 176% increase from that of the previous year, highest in Asia • Asia’s largest concentration of hedge funds, (245), managing USD22bn in assets.

  10. Hong Kong as RMB Settlement Centre • Narrow banking since 2004 (deposit-taking, conversion, remittances and card business) • RMB bond issuance since July 2007 (mainland banks and subsidiaries of HK banks) • RMB trade settlement since July 2009

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