Press Release
HK - China's international gateway and a regional financial hub
Monday, November 18, 2002
The Secretary for Financial Services and the Treasury, Mr Frederick Ma, believes that Hong Kong will further enhance its role as China's international gateway and be a major international financial centre in the Asian Time Zone and regional financial services hub in the future.
Sharing his vision for the development of Hong Kong's financial market at a joint chambers of commerce luncheon today (November 18), Mr Ma said he saw great potential for the development of our bond market. He also believed Hong Kong would become the region's fund management centre as well as centre for insurance and reinsurance.
Putting Hong Kong in historical perspective since 1973 - the year of Hong Kong's great stock market boom and bust, Mr Ma said today's doom and gloom were just all the similar challenges and competitions Hong Kong had faced and successfully overcome in the past.
Noting that 1973 is also the first year that the expression "regional financial centre" appeared in the then Governor's Policy Address, Mr Ma pointed out that financial services, including insurance, real estate and business services now account for some 15% of our workforce (489,300 jobs) and nearly a quarter (23.2%) of our GDP. "Hong Kong delivers on its promises and is an international financial centre today," he said.
"Much of our future success, like our past success, will depend on Hong Kong's unchanging fundamentals: free flow of capital and information, an independent judiciary based on the rule of law, clean and efficient government, and a simple and low tax regime. Add to this, no exchange controls, transparent regulation and state-of-the-art telecommunications," Mr Ma said.
Noting that we cannot afford to be complacent in this rapidly globalizing economy, he said: "We need to stay ahead of the game. And that is what the Financial Market Development Task Force, which I now chair, was set up to do."
On the equity market, Mr Ma said the listing of Mainland enterprises had boosted the stock market of Hong Kong. "The Government will continue to encourage this mutually beneficial commercial activity through visits and participation in promotional activities. We will also enhance our attractions by sensible improvements to and investment in our institutions. State of the art quality market infrastructure, allowing scrip-less transactions and straight-through processing, are important. But good corporate governance and investor protection are also key ingredients. We are making good progress on these fronts."
Turning to the bond market, which is a star of attraction amid low interest rates and stock market volatility these days, Mr Ma said: "It is an area where I see great potential for development."
He said the Hong Kong dollar bond market had made significant progress with much more diverse products and much stronger retail interest recently and the authorities concerned were acting quickly to remove impediments to growth through legislative and administrative measures. The Government is also encouraging public sector bodies to come to the market, he added.
In developing our own debt market, the Government is mindful of the need to encourage our neighbours to do the same. "Together with Korea and Thailand, we are co-leading APEC's Development of Securitisation and Credit Guarantee Markets Initiative, which aims to remove impediments to the development of such markets in the region. We are also actively exploring the setting up of an Asian Bond Fund to improve the flow of savings funds within the region," Mr Ma said. In addition, he also positioned Hong Kong as the fund management centre of the region.
On banking - an area in which Hong Kong is already having an open market, Mr Ma noted that measures have been introduced since May this year to provide a truly level playing field for all who want to enter. He also saw tremendous growth of private banking business in Hong Kong over the next ten years.
With insurance being a growth area and a growing and increasingly creative industry in Hong Kong, Mr Ma said the Government would continue to encourage this, subject to a light but prudent regulatory framework. "We aim to facilitate the development of reinsurance and captive insurance business. Given China's growth, there is also considerable potential for Hong Kong to develop as an off-shore insurance base," he said.
In conclusion, Mr Ma sees a great future for Hong Kong as a major International Financial Centre and companies around the world wishing to enter the Mainland market will continue to find Hong Kong the perfect place to do business.
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