three decades. china is clearly at the centre in all these three megatrends. china's pursuit of a highquality growth model will represent a paradigm shift, in terms of a manufacturing sector that will move up the global supply chain through innovation and technology ; in terms of a greener and more sustainable development model ; in terms of a more consumption driven economy that promotes social equality and healthy ageing. all these exciting trends require gigantic capital investment. the funding need can hardly be met by the public sector alone. traditionally, asia has been a bank - centric region. going forward, we should expect increasing fundraising activities through equity listing, bond issuance and alternatives such as private equity, venture capital, and private credit. 2 / 5 bis - central bankers'speeches what the pe and vc industry can bring goes beyond capital. the real value it can create is to identify businesses and start - ups that have promising products and potential, bring management knowhow, raise the level of productivity and corporate governance, and create network effect for their portfolio companies. so why is hong kong relevant? hong kong is a major private equity hub in asia. it currently manages 215 billion us dollar - worth of assets, second only to mainland china. hong kong is home to around 650 private equity and venture capital firms, of which close to 60 % are regional headquarters. the congregation of private industry firms in hong kong is a result of multiple factors. geography is one. hong kong is at the heart of asia. within a five - hour flying radius we can reach half of the world's population, a big plus for an industry that relies heavily on in - person communication and on - site inspection. and then there is also a strong ecosystem that is underpinned by the rule of law that adopts english common law, a reputable arbitration system, free flow of capital, a resilient financial system, simple and low taxation regimes, a cosmopolitan lifestyle, and more importantly, a deep and diversified talent pool. more specifically to the pe and vc industry, the hong kong ipo market provides a great exit channel. this platform has become even more competitive after a series of listing reforms in recent years that facilitate the listing of new economy companies and pre - revenue, pre - profit biotechnology companies. so far, 260 new economy companies have been listed in hong kong and raised a total of 916. 5 billion hong kong dollars. the government and the regulators are also taking active steps to provide a more enabling

environment for the pe and vc industry. hong kong now offers diversified fund structures through the introduction of the open - ended fund company ( ofc ) regime and a modernised limited partnership fund ( lpf ) regime, both providing also a redomiciliation mechanism. these two regimes have gained traction since their introduction. so far, more than 1000 ofcs and lpfs have been established in hong kong. on the taxation front, hong kong has an extensive network of comprehensive avoidance of double taxation agreements, or dtas, that cover major economies in asia including mainland china, japan, india, indonesia, as well as many major markets in europe, north america and the middle east. our dtas offer very favourable terms, in that they offer lower dividend and interest withholding rates. we are working hard to further expand the dta network. locally, we are exploring the scope for further enhancements to the carried interest tax concessions arrangement, based on the implementation experience so far. we are also reviewing the tax exemption regime for funds to identify possible areas of enhancement to better support the development of the fund industry. meanwhile, the hkma's exchange fund investment office is rendering tangible support for managers based in hong kong. it has already established alternative asset portfolios with dedicated allocation to smaller local hedge fund managers. the next step 3 / 5 bis - central bankers'speeches is to set up a dedicated allocation to smaller pe funds managed by local managers and those seeking to expand their hong kong operations. another exciting development is the establishment of the hong kong investment corporation ( hkic ). hkic consolidates the various public investment pockets introduced by the government in recent years, including investments in the greater bay area, strategic technology, portfolios with hong kong nexus, as well as the newly established co - investment fund. hkic has commenced operation recently and is identifying quality partners to make strategic investments. the hong kong government is also taking a proactive approach to provide further impetus to the long - term, balanced growth of the local economy and to make the city more liveable and sustainable. top priority is talent. hong kong currently hosts five of the global top hundred universities. but we want to attract more talent to deepen the bench. in less than a year, the various talent entry schemes have already granted permission to over 110, 000 talents from all around the world, and we continue to see a strong pipeline. looking for new growth areas is also important. in the years ahead, hong kong will leverage