"There is a great urgency for China to develop an international
financial center of global significance within its own borders,"
said David Li, a lawmaker of the Legislative Council of the Hong
Kong Special Administrative Region (HKSAR), on Monday.
Li was speaking as convenor of a focus group on financial
services, one of four groups the HKSAR Chief Executive established
at an economic summit on "China's 11th Five-Year Program and the
Development of Hong Kong" last September.
In its report to the Chief Executive Monday, the financial
services focus group had six proposals and 80 specific
recommendations. Chief among them was the need for Hong Kong to
develop further as China's international financial center of global
significance.
"We believe that Hong Kong has the infrastructure, the
transparent legal and regulatory environment, and the market depth
to contribute in these areas for the benefit of the entire mainland
economy," he said.
He stressed the window of opportunity will not last forever. "If
we do not act now, inertia will set in, and the business will
gravitate to established financial centers overseas."
The report offered a five-pronged strategy to pursue the
nation's economic development and financial reform in a more
significant manner.
It includes enhancing the presence of Hong Kong financial
intermediaries in the mainland to provide financial services on
location, and enhancing the outward mobility of mainland investors,
fund raisers and financial intermediaries.
It also includes allowing financial instruments issued in Hong
Kong to be marketed in the mainland, enhancing the capability of
Hong Kong's financial system in handling financial transactions
denominated in renminbi, and strengthening financial infrastructure
linkages between the mainland and Hong Kong.
"As an international financial center, we should take steps to
make it easier for overseas issuers to list in Hong Kong. Efforts
should also be made to establish a more flexible regulatory and
operational infrastructure for local, mainland and overseas
financial intermediaries and investors," he said.
On the development of a renminbi futures and options market, he
proposed consolidating Hong Kong's lead in offshore renminbi, and
expanding the range of non-deliverable renminbi products.
Li noted that China is one of the world's largest consumers and
suppliers of commodities, precious metals and other raw
materials.
"There is an increasing need for efficient price discovery
within our time zone. As a first step, we propose that an
independent consultancy study be commissioned with a view to making
concrete proposals for developing a commodities futures market in
Hong Kong," he said.
Another chief recommendation was to establish an effective
insurance market and asset management sector. These, he said, are
essential for efficient risk management, financial intermediation,
and wealth preservation within the mainland.
"We also propose that Hong Kong promote itself as a center for
international captive insurance, that we expand the opportunities
for Hong Kong residents to become mainland insurance practitioners,
and that we foster the further development of the asset-management
industry," he noted.
(Xinhua News Agency January 16, 2007)