Actively dovetailing with the Qianhai Plan to expedite the integration into the overall development of the country
MR CHAN CHUN-YING (in Cantonese): Deputy President, I would like to thank Ir Dr LO Wai-kwok for proposing this motion and the six colleagues for their amendments, urging the SAR Government to formulate a comprehensive strategy with new thinking and new vision with a view to expediting the integration of Hong Kong into the overall development of the country.
The Qianhai Plan has an extensive scope. On the financial front, it is stated that innovations in financial institutions, markets, products, and supervision shall be actively and steadily promoted, so as to provide all-around and multi-level financial services for consumption, investment, trade, and scientific and technological innovation.
The Qianhai Plan proposes that the role of Qianhai as a pilot and demonstration window for opening up the financial sector of the country and a pilot zone for innovation in cross-border Renminbi (“RMB”) business should be enhanced, and pilot programmes shall first be launched in fields such as interconnection with Hong Kong’s financial market, cross-border use of RMB and facilitation of foreign exchange management. In respect of cross-border use of RMB, the Qianhai-Shekou Free Trade Zone Area has already launched a series of cross-border innovative businesses such as two-way equity investment, asset transfer, RMB loans, two-way bond issuance and two-way capital pool.
The SAR Government, together with Hong Kong’s financial institutions, can take advantage of these favourable policy conditions to develop more innovative services, such as unifying its standards for green financial products. Despite increasing emphasis on carbon neutrality in the Mainland, there are still some differences between the current green financial standards in the Mainland and those in the international arena. Transformation is expected in the future by exploring the establishment of a unified green finance standard. I suggest that focus should be placed on two areas first.
The first area is green certification. The development of green certification in Hong Kong started early. The Hong Kong Quality Assurance Agency, by drawing on international standards, launched the Green Finance Certification Scheme to provide manufacturers with assistance on green certification, and a good reputation has been built up. In the future, Hong Kong’s green certification services may be extended to Qianhai and even the entire Greater Bay Area (“GBA”).
The second area is promoting green information disclosure. In 2012, Hong Kong began publishing three editions of the Environmental, Social and Governance Reporting Guide to gradually standardize ESG disclosure requirements for listed companies. In the future, a green information disclosure system can be introduced into Qianhai and even the entire GBA in order to achieve integration with the market resources in Hong Kong to build a unified and open green database. Through enhanced cooperation and the establishment of a unified standard, it is believed that this will help enhance the transparency of information on green finance in Qianhai, boost investors’ confidence and enable more effective matching of the demand and supply sides, thereby promoting rapid progress in the development of green finance.
The Qianhai Plan also mentions that the pilot programme of the bank account that integrates domestic and foreign currencies shall be launched. The financial industry in Hong Kong will be able to provide faster and more convenient bank account services covering settlement, investment and financing in accordance with the relevant policies and the needs of customers in the region. At the same time, it can, by leveraging Hong Kong’s position as a trading platform in the offshore RMB market and its quotation capabilities, provide customers with a portfolio of cross-border RMB products, help enterprises in the cooperative zone to make better use of the domestic and overseas markets and resources, and explore new mechanisms for cross-border trade finance and international payment and clearing.
Deputy President, the financial industry in Hong Kong has accumulated a lot of experience in participating in and supporting the implementation of the financial interconnection mechanisms, including the Shanghai-Hong Kong Stock Connect, the Shenzhen-Hong Kong Stock Connect, the Bond Connect and the Mainland-Hong Kong Mutual Recognition of Funds. As the next step, the Government should closely follow up on the implementation of innovative policies to be introduced in the cooperation zone, take the initiative to play the role of both a participant and a promoter, and strive for the pilot implementation of product and service innovation in Hong Kong.
In addition, in terms of further development of cross-border RMB financing, cross-border RMB lending has been relatively stagnant in recent years owing to the inverted yield curve in the two places. However, as the interest rate gap between the two places has been narrowing or even remained the same in recent years, the banking industry in Hong Kong should start looking into the structural financing difficulties in the Mainland and invest more RMB in industries and enterprises that are in urgent need of capital. Furthermore, the SAR Government should promote the reform of withholding tax in the Mainland, especially in the Qianhai Cooperation Zone, and strive for tax relief to break the cost bottleneck of cross-border loans.
Deputy President, I believe that the Qianhai Plan will bring new opportunities to the financial industry in Hong Kong and the Government should lead the industry in proactively complementing and pursuing development together. As the proposals in the original motion and the amendments are feasible, I will support all of them.
Thank you, Deputy President.