Motion debate on the 2025 Policy Address(2nd debate session)
President, in this session, I will mainly speak on finance and the Northern Metropolis (“NM”). Firstly, I would like to reiterate my gratitude to the Chief Executive for accepting several of my proposals concerning finance. The Policy Address contains extensive contents on finance, including promoting asset tokenization, establishing a bond market hub, deepening Renminbi (“RMB”) business, expanding gold trading, consolidating the competitiveness of the capital market and expanding cross-boundary financial collaboration. This demonstrates the Government’s determination and drive to consolidate Hong Kong’s status as an international financial centre.
I have been proactively advocating for expanding the application scope of tokenized physical assets. Several pioneering initiatives are proposed in the Policy Address, including encouraging commercial banks to introduce tokenized deposits, promoting live transactions of tokenized assets, and regularizing the issuance of tokenized bonds by the Government. I believe that the implementation of such initiatives will enhance capital flows, shorten the time for cross-boundary payment and reduce costs. The application of tokenization will also encourage financial institutions to develop new products and accelerate the construction of Hong Kong’s digital asset ecosystem.
Regarding stablecoins, I note that they have become a market focus following the enactment of relevant legislation. However, stablecoins essentially do not have appreciation potential and are not speculative instruments, yet the market seems to be rather enthusiastic about them. It is hoped that when processing the current 36 applicants, the Hong Kong Monetary Authority (“HKMA”) will focus on how the actual use cases can address the market pain points, such as the efficiency and cost of payment settlement.
On another note, it is proposed in the Policy Address that HKMA will encourage the banking sector, especially banks in the Mainland, to establish regional headquarters in Hong Kong, whose institutional strengths and international networks can help them expand into markets such as Southeast Asia and the Middle East. As an industry representative, I look forward to more Mainland and even foreign banks establishing regional headquarters in Hong Kong to bring new breakthroughs to the development of Hong Kong’s banking sector. It is anticipated that the number of target banks will be limited, and I hope to see the results of the initiative as soon as possible.
HKMA will make use of the Currency Swap Agreement with the People’s Bank of China and introduce an RMB Business Facility to promote the development of the offshore RMB market, providing local enterprises with longer-term RMB financing support and meeting the long-term funding needs of the real economy. Access to stable and relatively low-cost funding will undoubtedly further expand the scale of RMB financing.
The Government will also issue more RMB bonds, which is conducive to cultivating an offshore benchmark RMB yield curve, enabling more accurate pricing of assets with different maturities and facilitating transactions. The initiative to consider settling government expenditure in RMB under suitable circumstances is expected to serve as a case of demonstration to open up and expand the scope of Renminbi usage in Hong Kong’s economic activities.
Since the launch of the RMB trading counter, its average daily turnover has accounted for less than 1% of the overall market. The Policy Address has adopted my proposal to include an RMB trading counter under Stock Connect’s Southbound trading for Hong Kong stocks to allow Mainland investors to purchase stocks directly in RMB. This can reduce their exchange rate risks and currency conversion costs, and is expected to enhance the trading activity of RMB-denominated Hong Kong stocks. I believe that the aforesaid new policies can elevate the development of offshore Renminbi in Hong Kong to a new level.
The Policy Address has also adopted the joint advocacy put forward by myself, Dr Starry LEE and Mr Rock CHEN to consider relaxing the listing requirements for companies with weighted voting right structures in order to support China Concept Stock companies in their return from overseas markets with Hong Kong being their preferred destination, and attract emerging industries and overseas enterprises to seek secondary listings in Hong Kong, thereby strengthening the local securities market. The Hong Kong Exchanges and Clearing Limited will also collaborate with Southeast Asian exchanges to attract more Southeast Asian issuers to list in Hong Kong, deepening financial market connectivity, expanding the international basis of the local capital market and providing international investors with more asset allocation options.
Several cross-boundary financial measures are proposed in the Policy Address, and one of them involves enhancing the Cross-boundary Credit Referencing and the Shenzhen-Hong Kong cross-boundary data validation platform to facilitate local banks’ credit assessment of Mainland residents and enterprises in Hong Kong. I propose that the SAR Government consult with relevant Mainland authorities to introduce a pilot whitelist on cross-boundary data flow in areas such as the Loop coupled with a data classification and categorization management system, thereby swiftly dismantling barriers to the flow of financial data throughout the Guangdong-Hong Kong-Macao Greater Bay Area.
The second one involves supporting Mainland enterprises in going global. Currently, many Mainland enterprises are actively establishing footholds targeting international markets. Introducing more incentives, such as favourable tax policies, can encourage Mainland enterprises to set up more Corporate Treasury Centres and regional headquarters in Hong Kong. The Commerce and Economic Development Bureau is now coordinating the Task Force on Supporting Mainland Enterprises in Going Global, which can bring new development opportunities for professional sectors such as banking, accounting and legal services.
In terms of the pace of bilateral trade growth, Vietnam has been the fastest-growing trading partner of Hong Kong in recent years. In 2024, the total trade volume between Vietnam and Hong Kong increased by 25.6% year-on-year, representing the largest growth rate among the top ten trading partners and demonstrating significant potential. It is proposed in the Policy Address that HKMA will collaborate with organizations such as the Hong Kong Association of Banks, the Hong Kong General Chamber of Commerce and the Federation of Hong Kong Industries, to lead delegations of banking representatives as well as small and medium enterprises (“SMEs”) to explore business opportunities in Southeast Asian markets such as Vietnam. This will enable local banks to deepen their regional networks, identify financing demands in emerging markets, and enhance the business coverage and competitiveness of Hong Kong’s financial sector.
NM is the most strategically significant city development plan in recent years. As I believe, how to gather speed and enhance efficiency for NM development is a focal point of concern for the entire community. The Policy Address announces the establishment of the Committee on Development of NM led by the Chief Executive, with three working groups under it. This has my full endorsement as it is believed to effectively elevate the level of decision-making.
The development of NM is industry-led, and industries are supported by individual enterprises. The private investment brought by enterprises constitutes a vital source of funding for NM development and can alleviate pressure on public finance, so attracting businesses and investment is pivotal to NM development. Policy design concerning land development, financing, taxation, talent recruitment, etc. has a direct bearing on enterprises’ willingness and enthusiasm to make a presence there. Successful precedents from the Mainland and Singapore demonstrate that preferential policies can significantly stimulate corporate presence and industrial growth. I am pleased to see the Government’s intention to introduce dedicated legislation for NM to remove barriers, streamline town planning procedures and establish a new regulatory framework conducive to innovation and technology (“I&T”) development.
Concurrently, industrial development requires the formulation of objectives, and the provision of guidance, appropriate economic incentives as well as technical and talent support for the I&T ecosystem to help enterprises avoid detours and achieve results as swiftly as possible. The Policy Address proposes setting up dedicated companies or bodies for various industrial parks, devising public-private partnership approaches, and introducing a range of financing schemes including equity, bonds, government injections and “provision of land as a form of capital participation”. It also introduces innovation to land rights with reference to the Mainland’s “1.5-level development” concept featuring flexibility in land use policy. These measures should draw in more fresh capital to attract more large-scale, high-quality leading enterprises to settle in NM, bringing long-term benefits to economic and industrial upgrading and transformation as well as employment and tax revenue.
If NM is to intensify efforts to attract leading enterprises, the Mainland’s experience in park development demonstrates that the successful introduction of leading enterprises would generate positive chain reactions by fostering a cluster of upstream and downstream businesses for the formation of a relatively complete industrial chain to achieve multiple objectives. The Government should promptly provide specific incentives to foster one or two successful cases involving leading enterprises making a presence there so as to create a promising start for industrial development.
As industrial growth requires talent to flourish, the development of the NM University Town is a perfect complement. However, apart from development prospects, quality of life significantly influences talent decisions on whether to move to a place. The 2025 World Talent Ranking shows that Hong Kong’s competitive weaknesses lie in its living conditions, particularly housing costs, and NM possesses substantial valuable land resources that present an opportunity to address this shortfall. There are views that Hong Kong can draw inspiration from the practices in the United Kingdom and Australia by introducing talent apartments under a “built-to-rent” model. These would offer accommodation of medium-to-long-term tenancies with relatively stable rental levels for incoming talent to alleviate their living pressure and enhance their willingness to settle long-term and contribute to the local economy.
President, NM represents a new engine for Hong Kong’s future development. As an expectation for the Policy Address, I have previously suggested that the Government should halt construction of a gallery and instead lease the entrance area of the old wing of the Hong Kong Convention and Exhibition Centre (“HKCEC”) on Harbour Road for setting up an exhibition area to introduce the land use planning for NM to various sectors by riding on HKCEC’s influence. I understand there may be differences between actual construction and the blueprint concept. Therefore, the Government could primarily make use of videos and images in the exhibition instead of conventional sandbox models to facilitate timely updates to the exhibition based on the actual progress. I look forward to the Government attaching importance to its promotional efforts to maximize NM’s presence on the global stage.
President, the Policy Address also encompasses several policy priorities closely relevant to people’s livelihoods, including supporting the development of SMEs, strengthening labour protection, expanding the social welfare network, and promoting a caring and inclusive society, reflecting the Government’s policy orientation towards fostering balanced economic and social development. It is hoped that all these policies will be implemented promptly in the light of the now-enhanced accountability system to propel our economy to forge ahead with continuous growth.
With these remarks, I reiterate my support for the Motion of Thanks.
Thank you, President.