The development of fintech and the strong desire of mainland Chinese companies to go global are conducive to Chinese and international banks setting set up operations in Hong Kong, according to the head of the city’s de facto central bank.
“While many international and mainland banks already use Hong Kong as a base to develop their regional business, we believe there is still enough room for growth for lenders to use Hong Kong as a platform to help their clients go global,” said Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority (HKMA), on Thursday.
Currently, 15 out of the 29 largest banks globally have their regional headquarters in Hong Kong, according to the HKMA.
Attracting more mainland and international banks to set up regional headquarters in Hong Kong was one of the key measures unveiled by Chief Executive John Lee Ka-chiu in his policy address on Wednesday.
Lee said establishing regional bases in Hong Kong could help banks leverage their presence in markets like Southeast Asia and the Middle East to provide comprehensive cross-border financial solutions.
Yue said the development of fintech and client data sharing among banks in Hong Kong in recent years had enabled Hong Kong-based lenders to help their clients easily expand into other markets, even where they did not have a significant presence.
“In fact, a lot of trade finance can be done in Hong Kong, as the city is an international financial centre with deep liquidity, which allows lenders to raise funds for their clients to expand across Asean and other markets,” Yue said in a media briefing after the HKMA’s first rate cut this year.
“We have seen strong demand from mainland and Hong Kong enterprises that want to expand into other markets, which provides a lot of opportunities for Hong Kong-based lenders. These opportunities would help Hong Kong attract more lenders to set up regional headquarters to help their clients achieve their global expansion goals.”
Benjamin Hung Pi-cheng, chairman of the Financial Services Development Council, said attracting more lenders to Hong Kong, along with other measures unveiled in the policy address, would strengthen the city’s financial status.
“The multifaceted approach in the policy address serves to broaden Hong Kong’s product offerings, deepen our market liquidity and enhance our global connectivity as an international financial centre,” said Hung in a statement on Wednesday.
“[The measures will] invariably help attract foreign and Chinese listings and [allow] corporates to use Hong Kong as a regional hub and treasury centre, ultimately helping them raise capital and manage their trade and investment flows more effectively,” added Hung, who is also the international president of Standard Chartered.
The measures in the policy address to boost “Hong Kong as an international hub for financial, trade, shipping and aviation” sent a strong signal to global investors,” said Agnes Chan, chairwoman of the Hong Kong General Chamber of Commerce.
“These policies will diversify our economy and reinforce Hong Kong’s role as an international hub for business, innovation and talent,” she said. – SOUTH CHINA MORNING POST