Speech by CE at Asian Financial Forum
11.1.2023

Following is the speech by the Chief Executive, Mr John Lee, at the Asian Financial Forum today (January 11): Deputy Commissioner Yang Yirui of the Office of the Commissioner of the Ministry of Foreign Affairs in the Hong Kong Special Administrative Region (SAR), Dr Peter Lam, Chairman of the Hong Kong Trade Development Council, distinguished guests, ladies and gentlemen, Good morning to you all. Welcome to the 2023 Asian Financial Forum (AFF). After two years of virtual AFF, this year's Forum is taking place in person and online. I'm delighted to be here, among the more than 2 000 of you taking in this 16th edition, live, from the Hong Kong Convention and Exhibition Centre. Another 3 000 or more are following Asia's premier annual financial forum online. I've learnt that more than 70 countries and regions are taking part, including nearly 20 international delegations. I am certain our incoming delegates will enjoy the dedicated tours and a host of special offers that are lined up by our Forum organisers. I'm delighted, too, to note that more than 100 global business leaders, policymakers, financial and wealth management professionals, entrepreneurs, technology innovators and economists will speak. They'll be offering specialist intelligence and insights, exchanging views on global finance and the economy, trade, sustainability and other issues crucial to the prosperous future we all want. This year's theme is "Accelerating Transformation: Impact ∙ Inclusion ∙ Innovation". Ladies and gentlemen, Hong Kong is living this theme, going ahead in the fast lane to make up for time we lost in the past few years. Over the past couple of months, Hong Kong has been on the path of orderly and progressive reopening. In September, we completely cancelled the hotel quarantine requirement. In November, we successfully hosted a three-day Global Financial Leaders' Investment Summit, where we welcomed over 200 international leaders from some 120 financial institutions to gather in Hong Kong, the first time in three years. Our doors have been opening wider and wider since. So, too, has our boundary with the Mainland, I'm pleased to tell you. Since Sunday - just three days ago - normal travelling across the Hong Kong-Mainland boundary has begun to resume. What does that mean? That means travellers are no longer subject to hotel quarantine after entering the Mainland from Hong Kong. That means much more convenience for business people, investors, tourists and of course, Hong Kong people who have longed for reunion with their family members in the Mainland over a separation of some three years. Rest assured, we'll go fast - in a safe and orderly manner - towards our shared goal of everything resuming normalcy as soon and as practicable as possible. While it is a happy and thrilling start to the year, we will not be complacent. Global forecasts for the year are not popular reading. The IMF (International Monetary Fund) says global growth in GDP (Gross Domestic Product) is likely to slow from 3.2 per cent last year to 2.7 per cent in 2023, adding that "the outlook is also fraught with uncertainty". That external "uncertainty" will weigh on Hong Kong this year. A small, open and free economy, we rely heavily on external trade and investment. While our short-term prospects may be challenging, our future looks bright. Thanks to the continuing and wide-ranging support of our motherland, Hong Kong's strengths as an international financial centre linking the Mainland and the rest of the world are primed to proliferate. We offer companies and investors a business-enabling environment, internationally aligned regulations and a free flow of capital and people, as well as plentiful opportunities coming from our deepening integration with national development. That includes the Guangdong-Hong Kong-Macao Greater Bay Area development, fuelled by our unparalleled access to the Mainland and our unique advantages under the "one country, two systems" principle. Under the clear direction of the National 14th Five-Year Plan, we are actively enhancing our strength as an international financial centre. That means boosting our niche as a global offshore Renminbi hub, and an international asset management and risk management centre. It includes, as well, a continuing expansion of the mutual access between the financial markets of the Mainland and Hong Kong, to the great benefit of our capital market. Hong Kong, of course, is a major global listing platform for companies, offering abundant access to capital. We are continuously modernising our listing regime, intent on capturing fresh opportunities presented by the changing global financial landscape. Last year, we revamped our listing rules for overseas issuers and established a new listing mechanism for Special Purpose Acquisition Companies. Beyond our prowess as a global fundraising centre, we are accelerating innovation in the wider economy. HKEX (Hong Kong Exchanges and Clearing Limited), our stock exchange, is revising its Main Board Listing Rules to enable fundraising for specialist technology companies that have yet to meet existing profit and trading requirements. HKEX is also looking into revitalising our Growth Enterprise Market, or GEM, to serve small and mid-sized issuers. Asset and wealth management is central to our financial future. We’ve been busy diversifying fund structures, creating an enabling tax environment, expanding the fund distribution network and promoting our real estate investment trust market. Last month, we proposed legislative amendments to provide tax concessions for family-owned, investment holding vehicles managed by single family offices here. I’m confident it will attract more family offices to call Hong Kong home. Financial technology is the future. And we're determined to make it ours. Today, more than 800 fintech companies call Hong Kong home. That's up from about 180 five years ago. They provide a diverse range of services, from virtual banking, asset management and insurance technology, to robo-advisory, blockchain, digital trading, payments and cybersecurity. We're working closely with our financial regulators and public agencies to enhance Hong Kong's fintech infrastructure, provide an enabling regulatory framework, encourage financial innovation and nurture talent. Over the past two years, we've launched two rounds of the Fintech Proof-of-Concept Subsidy Scheme. It encourages fintech players to test innovative concepts that can both boost their operational efficiency and expand customer services. In 2021, the Scheme approved more than 90 projects covering such key financial service areas as wealth management, regulatory compliance, insurance and payment. It also funded the trial of robo-advisors and the digitisation of anti-money laundering, risk monitoring, client authentication, insurance claims and ESG (Environmental, Social and Governance) technology assessment. Such a long list! The Scheme's second round is still open. To date, we've received more than 120 applications. In October, the Hong Kong SAR Government issued a policy statement on the development of virtual assets in Hong Kong. I can tell you we are serious about and dedicated to creating a facilitating environment for the sustainable and responsible development of virtual assets in Hong Kong. That also means incorporating the necessary guardrails to mitigate risks, so that virtual asset innovations can thrive in the city in a sustainable manner. Regarding regulations, the Government has completed the legislative work for a new licensing regime for virtual asset service providers. The Securities and Futures Commission will soon open public consultation regarding licensing conditions, including how retail investors may be given a suitable degree of access to virtual assets. Let me add that the first crypto futures Exchange Traded Fund was listed on the HKEX last month. In due course, the Hong Kong Monetary Authority will announce the next steps regarding the regulatory regime for stablecoins. We are also exploring a number of pilot projects to test the technological benefits of virtual assets and their applications in financial markets. Projects include Green bond tokenisation and e-HKD, our retail Central Bank Digital Currency. Fintech can also help promote financial inclusion and improve quality of life. The Faster Payment System, or FPS, launched in 2019, has expanded from instant payment and transfer functions. It now supports person-to-person and merchant payments, as well as account top-ups and the payment of government bills and fees using QR codes. Last year, FPS registrations reached some 11 million. More than 80 per cent of our government departments now provide the service as a payment option. Meanwhile, we are pushing the financial service sector's digital transformation to new frontiers. The Commercial Data Interchange, launched in October, allows enterprises to share their data with banks through a central platform, enabling more convenient financial services. Traditional financial services will play an important role in our future as well. Last month, the Hong Kong SAR Government issued a "Development Roadmap for the Insurance Sector in Hong Kong". The goal is to consolidate our status as a global risk management centre and insurance hub. We will also support market development in such targeted areas as insurance-linked securities, reinsurance and specialty business, offering diverse, risk management solutions. We are working towards the establishment of insurance after-sales service centres in such locations as Nansha in Guangzhou and Qianhai in Shenzhen. These will provide Hong Kong policy holders in the Greater Bay Area with support for compensation claims, policy renewals and general enquiries. We will also implement a risk-based capital regime to align with international standards and best practices. And there's more. We are conducting public consultation on proposals to establish a policyholders' protection scheme, providing an additional safety net for all. We need to tell the world that, ladies and gentlemen, all these examples of the financial market transformation are underway here in Hong Kong. You'll hear a great deal more about that continuing transformation over the next two days of the Forum. The Forum's new Global Spectrum series, for example, will examine topical issues in financial services, featuring dedicated spotlights on fintech, healthcare, food and agriculture and more. In less than two weeks, we will celebrate the Chinese New Year - the Year of the Rabbit. Rabbits symbolise peace and prosperity, and the world clearly has an acute need of both. I know, too, that rabbits can run. And my team and I have a lot of running to do this year. We'll be leading delegations to longstanding and emerging markets in the region, and around the world. We need to tell them - to tell the world - that Hong Kong is back on the centre stage, and what that means for the countries, economies and companies that partner with Hong Kong. What it means is opportunity - long-term, long-rewarding opportunities. Thanks to our "one country, two systems" principle, Hong Kong is blessed with a wealth of prospects - in financial services, in trade and logistics, in innovation and technology, in arts and culture and much more. So many good stories to tell. So many opportunities to realise. My thanks to the Hong Kong Trade Development Council and the Financial Services and the Treasury Bureau for organising another dynamic and rewarding Asian Financial Forum. I wish you all the best of business over these next two days and a prosperous Year of the Rabbit. Thank you. Ends/Wednesday, January 11, 2023 Issued at HKT 12:05 NNNN