Hong Kong Adopts '5 Pronged' Financial Centre Strategy

by Mary Swire, Tax-News.com, Hong Kong

25 September 2007

Speaking at last week's Asia Financial Forum, Hong Kong's Financial Secretary John Tsang revealed that the territory's administration has developed a five pronged strategy to bolster Hong Kong's role as a global financial centre for mainland China.

The five broad areas are: to expand the presence of Hong Kong's financial institutions on the Mainland; to raise Hong Kong's role in the outward mobility of Mainland funds; to offer Hong Kong's financial instruments to the Mainland; to develop Hong Kong's handling of renminbi-denominated transactions; and to dovetail the infrastructure of the financial systems of Hong Kong and the Mainland.

According to China's State Administration of Foreign Exchange, it had, as of early September this year, approved the applicable Qualified Domestic Institutional Investor scheme quotas for 21 banks, and two fund-management companies, totalling US$16.1 billion and US$2.5 billion.

"I am confident that this five-pronged strategy will strengthen Hong Kong's role as a global financial centre for China as a whole," the Financial Secretary stated.

"While we will be working hard at how to boost our interface with the Mainland's developing market and systems, we will also be reaching further afield to promote our financial services to the rest of the world. It is important that we explore business opportunities in other economies as well as the Mainland market. This we will earnestly do. And this, too, will help enhance our access to international investment opportunities," he added.

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