HK gets stronger as a financial hub, seeks more mainland links

Hong Kong Special Administrative Region ( HKSAR) Chief Executive Carrie Lam on Sunday brushed off foreign criticism and smearing of the city’s financial industry, saying its role as a global financial hub has only become stronger.

Lam’s comments came as some foreign media outlets and politicians have been predicting the end of Hong Kong’s highly globalized financial industry after the city implemented a national security law almost a year ago.

“Hong Kong’s ‘ golden name card’ as the world’s financial hub has not been scathed in the slightest degree in the past two years... as the city’s financial system showed outstanding stability and resilience in a difficult time,” said Lam.

At a financial summit held by ifeng. com, Lam also said that the HKSAR will further expand and improve its financial connectivity mechanisms with the Chinese mainland in order to grasp opportunities under national initiatives, including the Belt and Road Initiative and the GuangdongHong Kong- Macao Greater Bay Area.

Xi Junyang, a professor at the Shanghai University of Finance and Economics, said that the prosperity of Hong Kong’s stock market is mainly due to the stock link mechanisms between Hong Kong and the mainland, which have acted as an adjustment mechanism that protected both markets from experiencing volatility.

“The stock link mechanism provides a channel for Hong Kong and mainland investors to seek arbitrage between the two markets based on their valuation differences. It’s like a seesaw that has balanced the Hong Kong market’s liquidity level,” he told the Global Times.

Xi also noted that since the Hong Kong market’s IPO conditions are generally more flexible than those of the mainland, it’s inevitable that the number of mainland companies listed in Hong Kong will further edge up.