Yi Gang: Hong Kong's positioning and prospect as an international
financial centre
Speech by Mr Yi Gang, Governor of the People's Bank of China, at The People's Bank of China
and Hong Kong Monetary Authority Joint Seminar "Hong Kong's positioning and prospect as an
international financial centre", 9 December 2021.
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Thank you. Ladies and Gentlemen, good afternoon. It's a great pleasure to participate in this joint
seminar: Hong Kong's Positioning and Prospect as an International Financial Centre. On behalf
of the People's Bank Of China (PBOC), I would like to extend my warmest welcome to all of you.
The PBOC has been working closely with the Hong Kong Monetary Authority (HKMA) in
supporting Hong Kong's role as an international financial centre. Thanks to supports from our
friends and colleagues in the financial sector, the financial cooperation between Hong Kong and
Chinese mainland has seen remarkable progress in the following aspects:
First, a large number of mainland companies got listed in Hong Kong. Among all the listed firms
in Hong Kong, more than half are from Chinese mainland, contributing over 80% of the market
capitalization. From 2015 to 2020, Hong Kong topped the global IPO fund-raising list for 4 out of 6
years.
Second, the Securities Connect has been functioning well and enhanced over time. About 70%
of the A-shares held by international investors were traded through Hong Kong. We recently
launched Southbound Trading under Bond Connect, which will further enhance Hong Kong's role
as the financial hub.
Third, Hong Kong has been leading the world in offshore RMB business. By far, Hong Kong
contributes to nearly 50% of cross-border RMB payments, 60% of offshore RMB deposits, and
80% of offshore RMB bond issuance.
Fourth, the Greater Bay Area development helps enhance Hong Kong's role as an international
financial centre. Last year, the PBOC with relevant authorities unveiled multiple measures to
facilitate trade, investment and financing in the Area. This year, the Chinese government
launched a plan to further develop the Qianhai Cooperation Zone. It will also provide support to
Hong Kong's economic development.
Looking forward, we face both opportunities and challenges in developing Hong Kong as an
international financial centre. As for opportunities, China's high-quality economic development will
offer strong backing for Hong Kong. In recent years, Hong Kong has been actively exploring new
opportunities in areas such as investment and financing under the Belt and Road Initiative (BRI),
Fintech, and green finance. As for challenges, rising protectionism and the COVID-19 have taken
their toll on global economic and trade activities. As a free-trade port, Hong Kong has felt such
shocks keenly.
The PBOC has been and will continue to be a firm supporter for Hong Kong's development as an
international financial centre.
First, Hong Kong can tap its role as the gateway for Chinese mainland to the global market. We
will keep improving financial market connection to better meet investors' needs. Hong Kong can
further improve financial market services to reinforce its leading position in the global financial
market.
Second, Hong Kong can provide greater support to the financial connectivity under the BRI. As
the gateway for mainland companies to go global, Hong Kong can improve financial services to
better assist these companies' engagement in the BRI. As the global asset management hub,
Hong Kong can also attract more international investors in the joint development of BRI.
Third, Hong Kong can further develop RMB related assets and tools. Hong Kong plays a
significant role in RMB internationalization. Building on the existing Stock Connect, Bond
Connect, and Wealth Management Connect, Hong Kong can expand the list of
RMBdenominated assets and improve risk management tools.
Fourth, Hong Kong can actively explore Fintech. One of first Innovation Hub Centres of the BIS is
located in Hong Kong. The Centre is helping the PBOC, the HKMA, the Bank of Thailand, and the
Central Bank of the UAE in building the m-CBDC Bridge Project.
The PBOC and the HKMA have also signed an MOU on Fintech Innovation and Regulation in the
Greater Bay Area. Going forward, we can beef up cooperation in CBDC and Regtech to tap the
potentials of Fintech.
Fifth, Hong Kong can vigorously develop green finance. Both the PBOC and the HKMA are
members of the Network for Greening the Financial System (NGFS) and the International
Platform on Sustainable Finance (IPSF). We will continue to support Hong Kong in developing its
green finance system.
In the end, I would like to say a few words about recent fluctuations in the dollar bond market.
Last Friday, the Evergrande Group issued a notice saying that it may be unable to meet
guarantee obligation, which might have raised concerns to some Hong Kong investors. Here I'd
like to mention that, as a well-developed international financial center, Hong Kong has already
established an effective system of financial operations, providing well-defined legal provisions
and procedures on how to deal with relevant issues. The risks caused by a few real estate firms
in the short term would not undermine the market for the medium and long run. The PBOC is
committed to creating a level-playing field. Companies issuing bond overseas and their
shareholders will be urged to properly handle their debt issues, and meet their debt obligations in
accordance with law and market principles. This is a market event. It should be handled in a
market-oriented way based on law. The right and interest of creditors and shareholders will be
fully respected in accordance with their legal seniorities.
Ladies and Gentlemen, welcome again to this seminar. I look forward to your insights and I wish
this seminar a great success! Thank you!