Speech by CE at Hong Kong FIC & Bond Connect Summit
Following is the speech by the Chief Executive, Mr John Lee, at Hong Kong FIC & Bond Connect Summit today (July 7):
Honourable Governor Pan Gongsheng (Governor of the People's Bank of China), Deputy Director Zhang Yong (Deputy Director of the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region (HKSAR)), Mr Yu Wenjian (Chairman of the Shanghai Gold Exchange), Mr Kelvin Wong (Chairman of the Securities and Futures Commission), Mr Eddie Yue (Chief Executive of the Hong Kong Monetary Authority), Ms Bonnie Chan (Chief Executive Officer of Hong Kong Exchanges and Clearing Limited (HKEX)), distinguished guests, ladies and gentlemen,
Good morning. It gives me great pleasure to join you today for the Hong Kong Fixed Income and Currency and Bond Connect Summit.
A very warm welcome to Hong Kong. You are gathered here to explore new opportunities for growth in our city, the Chinese Mainland and the world.
Hong Kong has long maintained an enviable position in international financial services. In the most recent Global Financial Centres Index, we ranked third, globally, and first in Asia. We are the world's largest offshore Renminbi service hub, and was recently recognised as the world's largest cross-boundary wealth management centre.
The National 15th Five-Year Plan offers clear support for enhancing our status as an international financial centre, and establishing a commodity trading ecosystem in our city. Hong Kong is pressing ahead with preparing our own First Five-Year Plan. It will align with the national plan and provide fresh opportunities in our contribution to the national development.
Under the unique "one country, two systems" principle, our long-standing advantages – strategic location, competitive taxation, common law system and more – continue to ensure we serve as a multilevel bridge between China, our country and the rest of the world. It creates continuing opportunities for Hong Kong. And for the economies and companies that do business with Hong Kong.
Today, I am pleased to share with you two of those opportunities – both significant market updates that showcase Hong Kong's diverse and dynamic financial service offerings.
Allow me to begin with our favourite colour: gold. I am delighted to announce that the central clearing system for gold in Hong Kong officially begins its trial operation today. The Government-owned Hong Kong Precious Metals Central Clearing Limited will offer a comprehensive suite of services, ranging from gold deposits and withdrawals, to transaction settlements for the over-the-counter market in Hong Kong.
The initial gold deposits and the first transaction settlements have been completed. They involve multiple banks, as well as their clients, including mining companies, refiners, jewellers and other investors.
This milestone could not have been achieved without the support of our country, and the essential collaboration between the HKSAR Government, the Shanghai Gold Exchange, and the 11 financial institutions sitting on the board of the Central Clearing Limited.
In a world beset with geopolitical crises and macroeconomic volatility, gold is becoming one of the key pillars for liquidity and risk management. The launch of Hong Kong's central clearing system for gold will create the solid foundation, allowing us to take the next major step – and that's building a comprehensive gold trading ecosystem in Hong Kong, one that benefits a world of investors and institutional capital seeking safe-haven assets.
Under this new clearing system, we are introducing the initial phase of Delivery Connect in partnership with the Shanghai Gold Exchange. It creates a streamlined mechanism for participants, allowing them to use gold holdings to settle transactions in both the Hong Kong and Shanghai markets.
The initiative will effectively bridge the physical liquidity pools of both markets. Three banks are already participating in the initiative, and the two-way transfer will be completed today.
The new infrastructure is creating fresh opportunities in the market. Among them, HKEX has revitalised its US Dollar gold futures contract, which is attracting broad market attention.
Hong Kong is also considering development of a new Renminbi gold futures contract, with delivery support from the Shanghai Gold Exchange. In collaboration with Bloomberg, a new gold price ticker, called HAU, has also been introduced for gold traded and settled in Hong Kong.
HAU will ensure that Hong Kong gold prices are fully accessible to global market participants. It will also help lay the groundwork for Hong Kong to contribute a global reference rate for the gold trading market.
The goal, of course, is to build a highly sophisticated, institutional gold trading market in Hong Kong.
That includes significantly strengthening our gold storage and refining facilities in the coming years. The HKSAR Government is also considering offering tax incentives for eligible institutions conducting gold trading and settlement in Hong Kong.
With our united efforts, Hong Kong's gold trading ecosystem will become one that the world could bank on. It will provide a golden opportunity for investors, as well as a wide range of professional services concerned.
Because, after all, if gold is the world's safe haven, then Hong Kong will be its safe harbour – with a clearing system that makes every trade shipshape, and every trust bankable.
Let me turn now to my second important update – our thriving bond market. Over the past two months, Hong Kong has welcomed announcements on the issuance of 6 billion Renminbi in sovereign green bonds, and a five-year bond futures contract by the Central Government.
Later this morning, Governor Pan and I will witness the signing of an MOU between HKEX and the Cross-Border Interbank Payment System, the primary channel for cross-boundary Renminbi payment and clearing under the People's Bank of China.
The new collaboration will help propel the development of fixed income and currency in Hong Kong, strengthening Hong Kong's role as a premier offshore Renminbi centre.
Ladies and gentlemen, these promising market developments would not be possible without your dedication and support. For that, I am very grateful.
My thanks to the Securities and Futures Commission, the Hong Kong Monetary Authority, HKEX and Bond Connect Company Limited for organising today's Summit, and for your critical roles, and continuing support, in promoting the development of the Hong Kong market.
I wish you all a rewarding Summit and the best of business in the second half of this promising year for finance – and Hong Kong.
Thank you.
The Chief Executive, Mr John Lee, attended the Hong Kong FIC & Bond Connect Summit today (July 7). Photo shows (back row, from left) the Governor of the People's Bank of China, Mr Pan Gongsheng; Mr Lee, and the Financial Secretary, Mr Paul Chan, witnessing (front row, from left) the Chairman of the Cross-border Interbank Payment System, Mr Wang Hongbo, and the Chief Executive Officer of Hong Kong Exchanges and Clearing Limited, Ms Bonnie Chan, exchanging the memorandum of understanding at the ceremony. Source: HKSAR Government Press Releases
The Chief Executive, Mr John Lee, attended the Hong Kong FIC & Bond Connect Summit today (July 7). Photo shows (front row, from left) the Chief Executive Officer of Hong Kong Exchanges and Clearing Limited, Ms Bonnie Chan; the Deputy Financial Secretary, Mr Michael Wong; the Chairman of the Shanghai Gold Exchange, Mr Yu Wenjian; Deputy Director of the Liaison Office of the Central People's Government in the Hong Kong Special Administrative Region Mr Zhang Yong; the Governor of the People's Bank of China, Mr Pan Gongsheng; Mr Lee; the Financial Secretary, Mr Paul Chan; the Secretary for Financial Services and the Treasury, Mr Christopher Hui; the Chief Executive of the Hong Kong Monetary Authority, Mr Eddie Yu; the Chairman of the Securities and Futures Commission, Dr Kelvin Wong, and other guests at the event. Source: HKSAR Government Press Releases
The Chief Executive, Mr John Lee, speaks at the Hong Kong FIC & Bond Connect Summit today (July 7). Source: HKSAR Government Press Releases
