Speech by CE at Wealth for Good in Hong Kong Summit Principal Dinner
24.3.2023

Following is the speech by the Chief Executive, Mr John Lee, at the Principal Dinner of the Wealth for Good in Hong Kong Summit today (March 24): Distinguished guests, ladies and gentlemen, Good evening, and welcome to tonight's Wealth for Good in Hong Kong. This welcome dinner is all set because of what you have been doing in your own fields and because of your presence in Hong Kong today. I trust you found this afternoon's summit more than informative. Personally, I find it reassuring and inspiring. I have no doubt that everyone in this room needs reassurance following the turmoil this month in banking and in finance generally. It was only two weeks ago today that the first of a series of American regional banks collapsed. The shock waves spread across America, taking with it other regional institutions, before rippling across the Atlantic to Europe. Over the past week, we have witnessed what may well be just the beginning in the daunting process of transforming a banking giant founded in the 19th century. And the financial dust has yet to settle, in Switzerland, in America, or elsewhere in global banking. Fortunately, the Hong Kong banking sector's exposure to the turmoil is insignificant. If anything, this global crisis only underscores the strength of our banking sector. We possess the strong capital and liquidity positions to handle potential shocks on a wide-ranging scale. At the end of December, the total capital adequacy ratio of authorised institutions incorporated in Hong Kong stood at 20 per cent. That, ladies and gentlemen, is well above the international minimum requirements of 8 per cent. In the fourth quarter of last year, the average liquidity coverage ratio of category-one institutions was 162 per cent. Again, that's well above the statutory minimum requirement of 100 per cent. Meanwhile, our asset quality continues to be healthy, with a classified loan ratio of 1.38 per cent at the end of 2022. In short, the Hong Kong financial and banking sector is very healthy. Our adequacy and our liquidity levels are abundant. We are built to handle today's, and tomorrow's, market pressures. Built to reassure you and your future in Hong Kong. That resounding reassurance is built, ladies and gentlemen, on the unique "one country, two systems" principle, implemented successfully in Hong Kong since 1997. Under the innovative principle of "one country, two systems", Hong Kong is bestowed with the unparalleled advantage of having the strong support of our country, while maintaining robust connectivity with the rest of the world. It ensures that our embrace of capitalism, buttressed by the common law system, remains as strong as ever. President Xi Jinping has stated on various important occasions that "one country, two systems" is here to stay, and that Hong Kong's capitalist system and way of life will remain unchanged in the long run. It is the bedrock for our stability. It also creates the secure environment for businesses to prosper. For those of you interested in setting up a family office here, I want you to know that the thriving development of your business in Hong Kong is a central policy priority of the Hong Kong SAR (Special Administrative Region) Government. That is why, in my annual Policy Address last October, I emphasised the family office as "a key growth segment" of our asset and wealth management industry. It's why we have invited you here today. It's also why we issued, earlier today, a Policy Statement on Developing Family Office Businesses in Hong Kong. The new family office policy statement is wide-ranging. It covers everything from tax concessions and regulatory assistance, to a new Capital Investment Entrant Scheme, which offers a facilitated entry for residence by capital investments. We plan to provide profits tax exemption for family‑owned investment holding vehicles, managed by single family offices in Hong Kong, and we will continue to review our preferential tax regimes for funds and carried interest. We also plan to establish a Hong Kong Academy for Wealth Legacy. The Academy will ensure that we have a continuing flow of the right talent to serve and manage your wealth in Hong Kong. Aside from offering all the elements of wealth management training, the Academy will focus on green and sustainable investment, investment in arts and culture, in philanthropy and more. Speaking of philanthropy, Hong Kong has a long history of private investment in welfare and other social causes. Our latest figure shows that close to 10 000 charities in Hong Kong are exempt from tax. As for business operations, their approved charitable donations under profits tax were nearly US$560 million in fiscal year 2020-21. For individual donors, the amount goes even higher, with their charitable donations allowed under salaries tax reaching nearly US$1 billion in the same year. We are also working to make it easier to apply for charitable tax exemption status. InvestHK, our investment promotion agency that has helped organise today's event, has set up a dedicated FamilyOfficeHK team to assist family offices in their philanthropic initiatives, communicating and co-ordinating with government departments and developing partnerships among organisations. The team will also launch a Network of Family Office Service Providers covering private banks, accounting and legal firms, trusts and other professional service companies. We want to ensure that our family offices have the comprehensive services they need to thrive in Hong Kong. The good life extends well beyond business and finance. Hong Kong boasts a wealth of arts, culture and entertainment, a creative co-mingling of East and West. Under our country's 14th Five-Year Plan, Hong Kong's rise as an East-meets-West centre for international arts and cultural exchange is backed by national development strategies. You can see that right here in the West Kowloon Cultural District, which includes our venue today, the Hong Kong Palace Museum. Opened only last July, the museum features priceless national treasures from the Palace Museum in Beijing's historic Forbidden City. West Kowloon is home, too, to the M+ Museum, Asia's first global museum of contemporary visual culture. And consider this weekend in Hong Kong. Alongside Wealth for Good, we are hosting a Museum Summit, a gathering of some 1 300 prominent museum and heritage professionals from all over the world, today and through the weekend. Our two largest annual art fairs, Art Basel and Art Central, are also running today and tomorrow. This year's Art Basel Hong Kong, if I may add, is the largest since 2019, featuring about 180 galleries from over 30 countries and territories. This is also prime time for sports here. The World City Championship golf tournament is taking place now at the scenic Hong Kong Golf Club. Next week, our beloved Hong Kong Sevens rugby tournament returns, promising an exciting weekend of rip-roaring revelry. Our calendar this year is filled with cultural extravaganzas, wine-and-dine delights and sporting events, alongside trade expos and high-level symposia. That's Hong Kong, a global city built on business, trade and finance, a city infused with a flourishing, East-West culture. I invite you to make it your city. Your Hong Kong. Ladies and gentlemen, I wish you all a memorable and enjoyable evening, and the best of family business in the years to come. Thank you very much. Ends/Friday, March 24, 2023 Issued at HKT 19:58 NNNN