Hong Kong to leverage gateway status to bounce back strongly

He Shusi

Hong Kong to leverage gateway status to bounce back strongly

Hong Kong is betting big on a world of opportunities, and will shake off the burdens of COVID-19 by capitalizing on its robust financial system and unique status as a gateway for the Chinese mainland, heavyweights told the 14th Asian Financial Forum.

Speaking via video on the second day of the 14th Asian Financial Forum on Tuesday, Hong Kong Financial Secretary Paul Chan Mo-po said he believes the city’s economy may pick up speed in the second half of this year upon mass vaccination programs.

He cautioned that Hong Kong’s economy in the first half of 2021 will still be clouded by the COVID-19 pandemic, but he was optimistic about the long term.

“Hong Kong continues to be the business and investment bridge that links the Chinese mainland and overseas countries, and the city also is the important choice for mainland and overseas companies for listing their shares,” Chan said.

“As the government reforms its listing regime and enlarges the universe of the two stock connect programs, linkages between Hong Kong and mainland capital markets are further cemented, thus enhancing the liquidity position of those listed companies,” the finance chief told forum participants.

On Tuesday, Hong Kong’s Hang Seng Index rose 2.7 percent to hit a 20-month high of 29,642 points, with mainland traders buying a net US$3.4 billion of Hong Kong stocks. Daily turnover in the city rose to a record US$38.9 billion.

Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor said in her opening speech to the forum on Monday that Hong Kong’s fundamentals remain strong amid the challenges of the COVID-19 pandemic.

“Hong Kong’s financial system has demonstrated its strengths and resilience,” Lam said. “Our financial markets continue to operate orderly, and that includes the Linked Exchange Rate System. The Hong Kong dollar to the US dollar exchange rate has stayed on the strong side, reflecting investors’ continuing confidence in our financial markets.

“Thanks to our ‘one country, two systems’ framework and long-standing advantages, including an internationally aligned regulatory regime, the rule of law, a simple and low tax system and the free flow of information and capital,” the Hong Kong leader stressed, “we continue to be an ideal gateway between the mainland and the rest of the world. That very much includes our role as both a conduit for foreign capital investing in the mainland and the springboard for mainland companies looking to international markets.”

Lam said she has high hopes for the widespread use of vaccines and the Chinese mainland’s economic ascent to accelerate the global recovery. Last year, the global economy plunged roughly 4.4 percent, while Hong Kong’s GDP is expected to decline by 6.1 percent.

In his keynote speech on Monday, Guo Shuqing, secretary of Party Committee of the People’s Bank of China and chairman of the China Banking and Insurance Regulatory Commission, said Hong Kong has played a pivotal role in every stage of the country’s development in the past 40 years. Hong Kong will regain its vitality in the new development stage of China and Asia, he said.

The city is vital to the country’s new development pattern of “dual circulations”, and can continue to play an important part in the development of the Guangdong-Hong Kong-Macao Greater Bay Area, Guo said.

Also speaking at the forum, Jin Liqun, president and chairman of the Asian Infrastructure Investment Bank, said the global economy has been dragged down by the pandemic, and the current economic downturn is not a normal business cycle. He believes the pandemic will be gradually controlled this year, which will bring further impetus to economic recovery.

Jin called for enhanced cooperation among global economies, and more investment in scientific research, as the pandemic reflects a fragile global economic chain, and healthcare and digital technology is becoming more important.

The 14th AFF was jointly organized by the Hong Kong Special Administrative Region government and the Hong Kong Trade Development Council.

More than 5,000 global policymakers, financial experts, business leaders, economists, investors and entrepreneurs from some 70 countries and regions signed up to participate online for the first time to examine opportunities and challenges for finance, investment and business in the new global economic landscape.

Oswald Chan and Luo Weiteng contributed to the story.