CE meets Governor of People's Bank of China
The Chief Executive, Mr John Lee, met with the Governor of the People's Bank of China, Mr Pan Gongsheng, today (July 6) to exchange views on economic and financial issues. The Financial Secretary, Mr Paul Chan, and the Secretary for Financial Services and the Treasury, Mr Christopher Hui, also attended the meeting.
The Chief Executive, Mr John Lee, Photo source: reference image
Mr Lee welcomed Mr Pan and his delegation to Hong Kong. Mr Lee said that the National 15th Five-Year Plan supports Hong Kong in consolidating and enhancing its status as an international financial centre, strengthening its functions as a global offshore Renminbi (RMB) business hub, an international asset and wealth management centre, and an international risk management centre, as well as building a commodity trading ecosystem. The Hong Kong Special Administrative Region (HKSAR) Government is pressing ahead at full speed with the preparation of Hong Kong's First Five-Year Plan to proactively seize the major opportunities brought by the National 15th Five-Year Plan, and promote its high-quality development as an international financial centre. The HKSAR Government will continue to leverage Hong Kong's unique advantages of having strong support of the motherland and being closely connected to the world under the "one country, two systems" principle, continue to promote a mutual market access regime between Hong Kong and Mainland financial markets, facilitate the two-way flow of capital between the two places, and further enhance the competitiveness of Hong Kong as an international financial centre.
Mr Lee said that Hong Kong is one of the top three international financial centres in the world, and is also the world's largest offshore RMB business hub and the world's largest cross-boundary wealth management centre. With the country's support, Hong Kong has steadily expanded its offshore RMB business and continuously enriched the RMB product ecosystem. Hong Kong will continue to deepen collaboration with the Mainland and spare no effort in facilitating more efficient circulation of RMB funds in the offshore market and serving the country's prudent and solid advancement of RMB internationalisation.
Mr Lee said that the HKSAR Government is now striving to build an international gold trading market in Hong Kong, including the establishment of the Hong Kong gold central clearing system, to attract the storage, clearing and delivery of physical gold in Hong Kong, drive the development of related services such as trading, risk management, insurance, warehousing and logistics, and gradually build a comprehensive gold trading ecosystem. The HKSAR Government will continue to work with relevant Mainland authorities and the industry to take forward relevant work, improve the infrastructure of and support for Hong Kong's gold market, inject new impetus into the diversified development of the financial market, and thereby contribute to the development of the country as a financial powerhouse.
The Governor of the People's Bank of China, Mr Pan Gongsheng, Photo source: Xinhua News
New Measures to support development of Hong Kong's fixed income and currency market and offshore Renminbi business
The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Monetary Authority (HKMA), the People's Bank of China (PBoC) and the Securities and Futures Commission (SFC) announced today (July 7) a series of new measures to deepen the financial co-operation between Hong Kong and the Chinese Mainland, support the development of Hong Kong's fixed income and currency (FIC) market and offshore Renminbi (RMB) business, and reinforce Hong Kong's position as an international financial centre. These measures include:
- supporting the collaboration of financial infrastructure institutions in Hong Kong and Chinese Mainland to develop a Hong Kong FIC electronic trading platform;
- further enhancing and expanding the Southbound Bond Connect, including increasing the annual investment quota, developing bond repurchase (repo) business using Southbound Bond Connect bonds as collateral, expanding the product scope to cover products with HKD bonds and RMB bonds as underlying assets, connecting to the Macao bond market, and enhancing the management of Southbound Bond Connect market makers;
- supporting the inclusion of onshore bonds issued by the Ministry of Finance and Mainland policy banks that are held under Northbound Bond Connect as eligible margin collateral at the HKFE Clearing Corporation and the SEHK Options Clearing House;
- enhancing the Northbound Bond Connect operational arrangement to extend the settlement time and improve efficiency;
- further enhancing the Swap Connect to include the interbank Seven-Day Fixing Depository-Institutions Repo Rate (FDR007) as a reference rate; and
- supporting the launch of Hong Kong Exchanges and Clearing Limited Five-Year China Government Bond Futures in Hong Kong on August 3.
Building on this, the HKMA also announced five measures to support the development of the offshore RMB market and strengthen Hong Kong's role as a leading offshore RMB business hub, thereby enabling greater outreach to other regions and enhancing support for the real economy. These measures, underpinned by strong support from the PBoC, address industry suggestions for developing the offshore RMB market. These include:
- increasing the size of the HKMA's RMB Business Facility from RMB200 billion to RMB500 billion and extending tenors to include nine-month, two-year and three-year, effective on July 10;
- exploring to introduce a tendering mechanism of seven-day offshore RMB liquidity;
- exploring the issuance of offshore RMB short-term debt instruments to support the building of the offshore RMB yield curve;
- promoting the development of a bilateral currency transaction framework between Indonesian Rupiah and offshore RMB; and
- issuing good practices to banks to promote RMB adoption.
The Chief Executive of the HKMA, Mr Eddie Yue, said, "We are pleased to announce this series of measures, which will further deepen cross-boundary financial co-operation, strengthen financial market connectivity between Hong Kong and the Chinese Mainland, promote the development of Hong Kong's fixed income and currency market, and reinforce Hong Kong's position as an offshore RMB business hub and international financial centre. These measures are the result of concerted efforts of the HKMA, the PBoC and other relevant financial regulatory authorities in Hong Kong and on the Chinese Mainland. We will continue to work closely with the relevant regulatory authorities, the industry and financial infrastructure institutions to ensure timely and smooth implementation of the measures, and explore further enhancements."
Source: AI-found images
