Press release
LCQ10: Financial cooperation between Hong Kong and Guangzhou
Wednesday, October 25, 2006
Following is a question by the Hon Wong Ting-kwong and a written reply by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in the Legislative Council today (October 25):
Question:
It has been reported that the Guangzhou Municipal Government, having set down an objective to establish a regional financial centre with international influence by 2020 and proposed to inject RMB ￥180 billion for the development of the financial hub in Zhujiang Xincheng, intends to cooperate with Hong Kong in taking forward the plans for the financial industries concerned. In this connection, will the Government inform this Council:
(a) whether the officials of the planning department of the Guangzhou Municipal Government have made any proposal to the Hong Kong Special Administrative Region Government on cooperation in the financial domain in relation to the above plans;
(b) whether it has conducted any study on how Hong Kong can effectuate a complementary function should Guangzhou become a regional financial centre with international influence; if so, of the details; and
(c) whether it has conducted any study or assessment on the possible competition to and impact on Hong Kong arising from Guangzhou's enhanced efforts in developing its international financial business; if so, of the results?
Reply:
Madam President:
(a) As far as I am aware, the relevant authorities of Guangzhou have not contacted this Bureau or the other relevant bureaux/departments (such as the Constitutional Affairs Bureau and the Planning Department) of the Hong Kong Special Administrative Region Government on the development of the "financial hub in Zhujiang Xincheng" as mentioned by the Member.
(b) Our objective is to give full play to our role as the Mainland's capital formation and investment platform. Therefore, we have all along attached great importance to cooperation with the Mainland, including the Guangdong Province, in the area of financial services with a view to promoting economic development in both places. I led a delegation comprising representatives of the Securities and Futures Commission, Hong Kong Exchanges and Clearing Limited (HKEx) and the securities industry to visit the Guangdong Province as early as 2003. During the visit, we called on the leaders of the Guangzhou Municipal Government and participated in a conference organised by the HKEx to promote listing in Hong Kong. The purpose was to enhance communication between the two places in the area of securities market development, and to promote the financial services available in Hong Kong.
Looking ahead, we will continue to maintain liaison with the relevant authorities of the Guangdong Province through the Hong Kong/Guangdong Cooperation Joint Conference to support and promote financial cooperation between the two places, thereby achieving a win-win situation by complementing each other's strengths.
(c) Expediting financial reform on the Mainland and the maintenance of the status of Hong Kong as an international financial centre are two stated policy directions in the 11th Five-Year Plan. On the other hand, we understand that the outline of Guangdong's 11th Five-Year Plan has also proposed to rigorously develop its financial services sector. The proposal includes promoting the establishment of regional financial centres in such cities as Guangzhou. In addition, Guangdong has proposed specific policy measures for implementing the country's 11th Five-Year Plan, which include exploring reforms for local financial system and improving financial sector supervision etc.
In fact, the reforms of the financial system and the development of financial services undertaken by Mainland cities (including Guangzhou) may pose challenges to Hong Kong's status as an international financial centre. However, if Hong Kong can respond to the needs of the Mainland, the development of the Mainland's financial industry present abundant opportunities for Hong Kong. To explore ways of meeting the challenges and seizing the new opportunities, the Chief Executive convened the Economic Summit on "China's 11th Five-Year Plan and the Development of Hong Kong" on September 11, 2006. Market practitioners, professionals and academics were invited to provide suggestions on ways to further consolidate and strengthen Hong Kong's position as an international financial centre. The Focus Group on Financial Services is now conducting an in-depth study of these issues, including ways to strengthen our integration with the Mainland economy to better serve the financial intermediation needs of the large Mainland economy.
I would like to emphasise that we benchmark Hong Kong's financial markets against the world's top ranking cities in setting our targets, so as to fully deploy our strengths in contributing to the Mainland's financial reforms. We will continue to embrace the same principle when considering the challenges and opportunities presented to Hong Kong by the development of Guangzhou and other Mainland cities and exploring cooperation opportunities with these cities.
Thank you, Madam President.
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