Press Release
HK - China's international gateway and a regional financial hub
Monday, November 18, 2002
The Secretary for Financial Services and the Treasury, Mr Frederick Ma, believes that Hong
Kong will further enhance its role as China's international gateway and be a major international
financial centre in the Asian Time Zone and regional financial services hub in the future.
Sharing his vision for the development of Hong Kong's financial market at a joint chambers
of commerce luncheon today (November 18), Mr Ma said he saw great potential for the
development of our bond market. He also believed Hong Kong would become the region's fund
management centre as well as centre for insurance and reinsurance.
Putting Hong Kong in historical perspective since 1973 - the year of Hong Kong's great stock
market boom and bust, Mr Ma said today's doom and gloom were just all the similar challenges and
competitions Hong Kong had faced and successfully overcome in the past.
Noting that 1973 is also the first year that the expression "regional financial centre" appeared
in the then Governor's Policy Address, Mr Ma pointed out that financial services, including
insurance, real estate and business services now account for some 15% of our workforce (489,300
jobs) and nearly a quarter (23.2%) of our GDP. "Hong Kong delivers on its promises and is an
international financial centre today," he said.
"Much of our future success, like our past success, will depend on Hong Kong's unchanging
fundamentals: free flow of capital and information, an independent judiciary based on the rule of
law, clean and efficient government, and a simple and low tax regime. Add to this, no exchange
controls, transparent regulation and state-of-the-art telecommunications," Mr Ma said.
Noting that we cannot afford to be complacent in this rapidly globalizing economy, he said:
"We need to stay ahead of the game. And that is what the Financial Market Development Task
Force, which I now chair, was set up to do."
On the equity market, Mr Ma said the listing of Mainland enterprises had boosted the stock
market of Hong Kong. "The Government will continue to encourage this mutually beneficial
commercial activity through visits and participation in promotional activities. We will also
enhance our attractions by sensible improvements to and investment in our institutions. State of
the art quality market infrastructure, allowing scrip-less transactions and straight-through
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processing, are important.
But good corporate governance and investor protection are also key
ingredients. We are making good progress on these fronts."
Turning to the bond market, which is a star of attraction amid low interest rates and stock
market volatility these days, Mr Ma said: "It is an area where I see great potential for
development."
He said the Hong Kong dollar bond market had made significant progress with much more
diverse products and much stronger retail interest recently and the authorities concerned were
acting quickly to remove impediments to growth through legislative and administrative measures.
The Government is also encouraging public sector bodies to come to the market, he added.
In developing our own debt market, the Government is mindful of the need to encourage our
neighbours to do the same. "Together with Korea and Thailand, we are co-leading APEC's
Development of Securitisation and Credit Guarantee Markets Initiative, which aims to remove
impediments to the development of such markets in the region. We are also actively exploring the
setting up of an Asian Bond Fund to improve the flow of savings funds within the region," Mr Ma
said. In addition, he also positioned Hong Kong as the fund management centre of the region.
On banking - an area in which Hong Kong is already having an open market, Mr Ma noted
that measures have been introduced since May this year to provide a truly level playing field for all
who want to enter. He also saw tremendous growth of private banking business in Hong Kong
over the next ten years.
With insurance being a growth area and a growing and increasingly creative industry in Hong
Kong, Mr Ma said the Government would continue to encourage this, subject to a light but prudent
regulatory framework. "We aim to facilitate the development of reinsurance and captive insurance
business. Given China's growth, there is also considerable potential for Hong Kong to develop as
an off-shore insurance base," he said.
In conclusion, Mr Ma sees a great future for Hong Kong as a major International Financial
Centre and companies around the world wishing to enter the Mainland market will continue to find
Hong Kong the perfect place to do business.
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