Hong Kong Checks On Chinese Support Measures

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

26 October 2011

Concluding a trip to Beijing, Hong Kong’s Financial Secretary John Tsang has confirmed that he had held “solid discussions” with relevant bodies in Mainland China to follow up on the policies and measures Vice Premier Li Keqiang set out, in August this year, to support Hong Kong’s development.

A large number of the measures then announced by the Vice Premier are related to the financial area, reflecting the support of the Chinese government to strengthen Hong Kong's position as an international financial centre, by expanding the cross-boundary use of the renminbi (RMB). Tsang said that all Chinese bureaus and departments have been actively studying the Vice Premier’s policies, and that he believes they will be implemented soon.

For example, during Tsang's meeting with China Securities Regulatory Commission Chairman, Shang Fulin, both parties discussed the progress in launching a Hong Kong exchange-traded fund (ETF) on the Mainland market. As the Mainland authority has entered the final stage of establishing ETF trading methods and management, he hopes the details will be announced soon.

He confirmed that China was finalizing the technical details of how to allow investments in the Mainland’s equity market by means of the RMB Qualified Foreign Institutional Investor scheme; and he had received positive feedback from the State Council’s State-owned Assets Supervision & Administration Commission on the encouraging of state-owned enterprises to set up listed branches in Hong Kong.

In addition, Hong Kong will work closely with the Ministry of Commerce and the People’s Bank of China to ensure smooth implementation of the managing of foreign direct investment from Hong Kong enterprises on the Mainland. Officials from the Ministry and the Bank are to be invited to Hong Kong to promote the initiative.

Tsang also added he will meet with the Ministry’s officials on the further supplement to the Mainland and Hong Kong Closer Economic Partnership Arrangement, which gives preferential treatment to Hong Kong enterprises to enter Mainland markets, and which, currently, covers more than 1,600 products and 40 services sectors.

The new supplement will achieve the full liberalization of trade in services for Hong Kong by the end of the 12th Five-Year Plan period in 2015, and Tsang indicated that the aim is to come to an agreement by the end of this year.

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