China
HKMA chief says Hong Kong resilient as global financial hub
  ·  2021-08-23  ·   Source: Xinhua News Agency

Hong Kong remains resilient as a global financial hub favored by investors and businesses from around the world despite external uncertainties and challenges, Chief Executive of the Hong Kong Monetary Authority Eddie Yue has said.

Yue told Xinhua in an exclusive interview recently that Hong Kong's financial strength is attributed to the unique advantages from "one country, two systems."

Under the arrangement, Hong Kong will be able to grasp the opportunities from a rapid-growing mainland economy and at the same time retains a globally-recognized financial system that makes it an effective bridge between the mainland and overseas markets, he said.

Yue stressed that Hong Kong has held up well against unfavorable conditions over the past years, including social unrest, so-called U.S. sanctions, and the COVID-19 epidemic.

Some 50 billion U.S. dollars flowed into Hong Kong last year, and the stock market here was the second largest worldwide. Hong Kong's foreign exchange reserves are abundant, and the linked exchange rate system performs well. The banking system also operates stably with sufficient capital and low risk.

The International Monetary Fund recently released a report that reaffirmed Hong Kong's position as an international financial center.

According to the World Investment Report 2021 released by the United Nations Conference on Trade and Development, Hong Kong remained the world's third-largest destination for foreign direct investment in 2020.

Yue believes foreign investors remain optimistic about Hong Kong's prospects.

Thanks to the enactment of the national security law in Hong Kong, stability and tranquility were resumed, which has provided a stable business environment and made financial institutions at ease here, he said.

A year ago, some foreign investors were concerned as the national security law began to take effect, but now they are only interested in how to seize the emerging opportunities in Hong Kong and the Chinese mainland, especially financial technology and green finance, Yue said. "They actually consider putting more resources and expand business here."

Looking ahead, Yue believes Hong Kong's financial markets will continue to prosper due to increasing closer ties with the mainland, citing more opportunities for various financial institutions from banks to asset management companies.

Currently, about 60 percent of purchases of mainland bonds and two-thirds of stocks by foreign investors are made through Hong Kong's connect programs, Yue said.

Yue expects the upcoming southbound trading of Bond Connect and the wealth management connect in the Guangdong-Hong Kong-Macao Greater Bay Area will bring even more impetus to Hong Kong's financial system.

"Despite challenges in the past two years, Hong Kong's financial industry is still stable. Its international financial center status does not diminish but has become even stronger," Yue said, noting that with the strong backing of the mainland, Hong Kong's financial development will continue to be resilient and investors will remain confident.

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