SAR ‘decisive, well prepared’ for any eventuality this year
The Hong Kong Special Administrative Region is well prepared for whatever may happen this year, given that geopolitical uncertainties have spilled over into the global trading system and economic globalization, Financial Secretary Paul Chan Mo-po told the 2019 Asian Financial Forum on Monday.
Despite the negative impact caused by the trade tensions among the world’s major economies — higher costs for exporters, importers and consumers, mounting downside risks for economic growth, growing volatility in financial markets that affect global investment and business sentiment — the SAR has been decisive in preparing for any eventuality, Chan said in welcoming remarks in a keynote luncheon address.
“Protectionism won’t happen in Hong Kong,” he said.
Long seen as a connector linking the West and the East, Hong Kong has done a lot for free trade in a multinational trading system, as well as for the free flow of capital, people and information.
To meet global financial regulatory standards, Chan said the city is preparing a risk-based capital regime for the insurance industry, as well as a new secretary corporate rescue proposal.
Efforts in market development will be another significant move, partly, given the new listing rules of the Hong Kong Stock Exchange launched last year have boosted it as a centerpiece destination for initial public offerings, he pointed out.
The SAR government could, Chan added, commit itself to maintaining its status as a regional wealth management center, provide tax exemption for onshore and offshore bonds, play key role in the Guangdong-Hong Kong-Macao Greater Bay Area, connect the technology with the financial services industry, and develop green finance.
The luncheon, sponsored by China International Capital Corporation, also featured an address by Robert Zoellick, former president of the World Bank.
Zoellick, who’s also a former US deputy secretary of state and US trade representative for former President George W. Bush, said Asia tended to be the main driver of the world economy, accounting for about two thirds of global growth.
He believed that Asia’s economic policy makers, traditionally, have a longer time horizon, based on his experience.
The old Asian growth model, which focused on low-end goods in the global supply chain, demands change, he urged.
Zoellick had once lived in Hong Kong in the 1980s and has witnessed the changes in China in its past four decades of reform and opening-up. “It truly has been historic and changed the world”.
Amid the global uncertainties and trade frictions, pressures on the financial system and capital market on the Chinese mainland have mounted. However, opportunities are also emerging in such an environment, said Bi Mingjian, chief executive of China International Capital Corporation.
China’s huge economic size and savings rate will deepen the attractiveness for long-term capital, including debt and equity with great risk tolerance, he said.
And, with the development of the Belt and Road Initiative, Chinese mainland companies and investors are piling into the projects in countries involved in the initiative, giving them a great chance to implement more market-oriented ways to meet world standards.
The collaboration of Chinese capital with overseas capital will also enhance the common interests of the major economies, he said.