Article source: Hong Kong Commercial Daily, Wise Money

The International Financial Leaders Investment Summit organized by the Hong Kong Monetary Authority was held in Hong Kong for three consecutive days from the 18th, with more than 300 leaders from international financial institutions gathering in Heung Kong. On the same day, HKEX held the "10th Anniversary of Connectivity Summit" in Hong Kong, attended by regulators and financial institutions from Hong Kong and the Mainland, to discuss opportunities for innovation and co-operation in the financial markets of the two places.

The summit on the 19th will be held at the Grand Hyatt Hotel in Wan Chai, with the theme of 'Navigating in Turbulent Times'. The guest lineup is star-studded, no less than the first two editions. Acting Chief Executive Chen Guoji and HKMA Chief Executive Eddie Yue will deliver speeches and presentations, and Financial Secretary Paul Chan will deliver a keynote speech at the luncheon. As for mainland officials, Li Yunze, Director of the China Banking and Insurance Regulatory Commission, Wu Qing, Chairman of the China Securities Regulatory Commission, and Zhu Hexin, Deputy Governor of the People's Bank of China and Director of the State Administration of Foreign Exchange, will participate in the panel meeting chaired by Eddie Yue.

Chief Executive of the Hong Kong Special Administrative Region Carrie Lam

Other attending institution presidents or CEOs include: China Bank (3988) Chairman Ge Haijiao, HSBC Group CEO Georges Elhedery, Standard Chartered Group CEO Bill Winters, Morgan Stanley CEO Ted Pick, JPMorgan Chase President and COO Daniel Pinto, UBS Group Chairman Colm Kelleher, BNP Paribas Chairman Jean Lemierre, Mitsubishi UFJ Financial Group Chairman Mitsuhiro Takeshita, and Citigroup CEO Jane Fraser, etc.

Tell a good Hong Kong story to international financial leaders

Financial Secretary Paul Chan Mo-po also said at the forum that mutual connectivity is an important measure of the country's reform and opening up. He believes that the value of Hong Kong's financial internationalization will further increase in the future. As time goes by, all the projects of mutual connectivity will experience a rise in quantity. The whole mechanism will continue to innovate and develop from quantity to quality in the future.

Financial Secretary of the Hong Kong Special Administrative Region, Paul Chan Mo-po

Chairman of the Hong Kong Securities and Futures Commission Carlson Tong Ka-shing said that Hong Kong is leveraging its differentiation advantages to complement the mainland market, helping to promote high-quality national development, and enabling domestic and foreign investors to share in the benefits of development. He pointed out that Hong Kong has recently been actively deepening its connections with markets in Asia and the "Belt and Road" regions, and the number of international exchanges recognized by the Hong Kong Stock Exchange has increased to 19, which will promote more diversified sources for listed companies and funds. He also noted that the market capitalization of new economy companies in the Hong Kong stock market has increased significantly, accounting for nearly 40%.

Hong Kong Exchanges and Clearing Limited (HKEX) Chairman Laura M. Cha pointed out that with the support of the central government, and the joint efforts of regulatory authorities and Financial Institution, the mutual market access has extended from Shanghai-Hong Kong Stock Connect to Shenzhen-Hong Kong Stock Connect, Bond Connect, and the Cross-Border Interbank Payment System (CIPS), continuously expanding the scope of investment and gaining more and more favor from domestic and foreign investors, thus enhancing the vitality of the capital markets in Hong Kong and the Mainland.

Ho Lik Fung: Further Deepening of Financial Reform and Development in Hong Kong

At the summit on the 19th, participants discussed the trends that will affect the future financial development, as well as their views and insights on the economy and future development. Vice Premier of the State Council He Lifeng stated that more high-quality enterprises will be supported to list in Hong Kong and issue bonds, and he put forward three suggestions to Hong Kong.

First, further deepen financial reform and innovation, the country supports Hong Kong to strengthen the banking industry, enhance the inclusiveness and attractiveness of the capital market through reform and innovation, steadily expand the bond market, actively develop the insurance market, and enrich offshore RMB financial products and services.

Ho Lap-fung continued to support Hong Kong in building a higher-level international asset management center, wealth management center, accelerating the development of green finance, financial technology, digital finance and other new formats, actively developing family office business, continuously cultivating new financial rise points, and shaping competitive new advantages. I hope Hong Kong will continuously optimize and improve the policy environment for financial development, and provide strong support and guarantee for further deepening financial reform and innovation.

Second, further expand the cooperation of Financial Openness, continuously add vitality to Hong Kong's financial development. Hong Kong is an open economy with a highly free and open international first-class business environment, a common law system, and international alignment. The country supports Hong Kong in maintaining its characteristics, leveraging its advantages, conducting more extensive and closer exchanges with the world, expanding international financial cooperation, actively expanding into emerging markets, attracting more international capital, first-class institutions, and talents to Hong Kong for development. Support Hong Kong to strengthen exchanges with other global international financial centers based on its own practical needs and development, actively learn from and absorb the latest experiences and achievements of global financial reform and development, and always stay at the forefront of global financial development.

Third, further align with the national development strategy, and focus on solidifying the foundation of Hong Kong's financial development. Hong Kong serves as a bridge and link for the country's opening-up to the outside world, while the country provides a solid foundation and strong support for Hong Kong's financial development. With the solid promotion of the country's high-quality development, Hong Kong's strategic position in the overall national development will become more prominent. Support Hong Kong's active participation in the country's expanded institutional opening-up, attract more foreign investment and optimize the regional opening-up layout, and fully leverage its unique role in it.

He continued to express support for Hong Kong to further strengthen the Belt and Road international investment and financing platform. Continuously enhancing the crucial Node role in the financial connectivity of the Belt and Road. Supporting Hong Kong, firmly grasping the development strategy of the Guangdong-Hong Kong-Macao Greater Bay Area, continuously promoting the regulatory coordination mechanism in the financial sector, aligning with key work deployment, implementing them on the ground, and continuously improving the quality and level of development of the Guangdong-Hong Kong-Macao Greater Bay Area construction. We hope that Hong Kong will continue to safeguard financial security. The central government will, as always, fully support and guarantee the deepening of financial reform and development in Hong Kong, and safeguard financial stability and security.

China Banking and Insurance Regulatory Commission: The door of China's financial opening-up will only become wider and wider.

In the discussion on future development, Li Yunze, Director of the China Banking and Insurance Regulatory Commission, stated at the summit that the door to the opening up of China's financial industry will only become wider. The China Banking and Insurance Regulatory Commission will continuously deepen the reform and opening up of the financial industry, and strive to create a market-oriented, rule-of-law, and internationalized business environment, supporting foreign Financial Institutions and long-term capital to participate more comprehensively and deeply in China's financial market. We sincerely welcome the establishment and operation of Financial Institutions and long-term capital from all over the world in China.

Li Yunze mentioned that in the next step, the China Banking and Insurance Regulatory Commission will strongly support Hong Kong in consolidating and enhancing its unique position and advantages, maintaining long-term financial prosperity and stability, and achieving better development in the process of integrating into the overall development of the country.

One is to continuously enhance the level of openness of the financial industry to Hong Kong and Macau, complete the regulatory adjustments involving new opening measures of CEPA as soon as possible, promote the early implementation of relevant cases, explore and promote the interconnection of regulatory mechanisms and rules, and study and introduce policies and measures to enhance the convenience level of Financial Service in the Greater Bay Area.

Second, actively support the economic development of the Hong Kong headquarters, encourage Chinese-funded banks and insurance institutions to set up overseas regional headquarters in Hong Kong, support banks and insurance institutions in both places to strengthen all-round cooperation, and provide one-stop Financial Service for Chinese-funded enterprises to go global.

The third is to help the construction of Hong Kong's international risk management center, support more mainland insurance companies in Hong Kong issuance catastrophe bonds, support the accelerated development of Hong Kong's international reinsurance market, and encourage Chinese banks in Hong Kong to participate in the construction of Hong Kong international gold exchange center.

The fourth is to deepen the financial cooperation between the two places in elderly care, and promote cross-border pension insurance cooperation services in the Greater Bay Area.

Fifth, support Hong Kong in cultivating and developing new productive forces, promote cooperation between banks and insurance institutions in green and low-carbon, artificial intelligence, and other emerging fields, and support Hong Kong in building an international innovation and technology center.

Six is to join hands to respond to risk challenges, further improve the communication mechanism of financial supervision between the two places, strengthen the exchange and cooperation in dealing with cross-border risks and crisis disposal, improve the arrangements for dealing with relevant risks, and fully support the safe and stable operation of Hong Kong's financial industry.

HSBC: Benefits of promoting the "Add One" strategy are many.

Ai Qi Zhi said at the summit that in recent years, the phenomenon of enterprises advancing the 'China Plus One' strategy has evolved into the emergence of 'Plus One' situations in multiple places in Asia, such as 'Plus One' in Indonesia, 'Plus One' in Thailand, 'Plus One' in Singapore, etc. In the Asian region, there are many benefits to be gained from promoting the 'Plus One' strategy.

According to Ai Qianzhuo, even China has been asked to undertake the task of building "One Plus", and when you observe the foreign direct investment (FDI) from China to ASEAN, China now accounts for about 50%, replacing investment from the United States, South Korea, and Japan entering ASEAN. If you look at the trade pattern, ASEAN has become China's largest trading partner, exceeding Europe and the United States, accounting for about 14% of China's exports. However, interestingly, about 30% of ASEAN's exports return to China. Therefore, he believes that this opportunity to establish "One Plus" in Asia has formed a substantial benefit and virtuous cycle.

He further stated that the Asian region also faces many challenges, including its high dependence on the US dollar and US dollar Intrerest Rate. For economies with floating currencies, the high US dollar Intrerest Rate puts pressure on the currency. Once the currency is under pressure, foreign direct investment and other financial investments will also come under pressure. For economies with pegged currencies, a high US dollar Intrerest Rate means high funding costs, thereby imposing certain constraints on the economy, especially in the case of Hong Kong facing a high interest rate environment and a sluggish economic background, which evidently exacerbates the cyclical patterns faced by the Asian region.

Goldman Sachs & Morgan Stanley: Foreign capital inflows need to boost confidence in the Chinese economy

Regarding global financing, Goldman Sachs Chairman and CEO David Solomon stated that global financing and M&A activities have not fully recovered from the pandemic. US companies have experienced a deterioration in their financial situation during the pandemic, which has increased the difficulty of financing. Additionally, factors such as the Russia-Ukraine conflict and inflation have slowed down capital market activities, with M&A activity being nearly 15% lower than the 10-year average. However, he expects financing and M&A activities in 2025 to be stronger after the new US government takes office.

At the same time, he said that global investors are still cautious about investing in China, but foreign investors are happy to see China's commitment to continue opening up its capital markets and implementing economic transformation, which will help boost confidence in China's economy. However, in order to see funds return to the Chinese market, it is necessary to see a recovery in the domestic consumption market. At the same time, the Chinese government also needs to maintain transparency to allow the outside world to understand the latest situation of the Chinese economy.

Morgan Stanley CEO Ted Pick said that the confidence of Chinese consumers must improve and there must be signs of economic recovery in order to rebuild foreign investors' confidence. Once confidence is restored, capital will begin to flow.

The US presidential election has settled, Jane Fraser, CEO of Citigroup, said at the peak meeting that there are many uncertain factors after the change of US president. First, tariffs, but it is believed that tariffs will not stall global trade, but may cause large-scale market changes. At the same time, the tax system may also change, ultimately causing inflation in the United States to rise again.

(Left to right) Chief Executive of the Hong Kong Monetary Authority Eddie Yue; Chief Financial Officer and Senior Managing Director of Blackstone Michael Chae; Chairman and Chief Executive Officer of Morgan Stanley James Gorman; Chairman of UBS Group Colm Kelleher; President of Bank of China Liu Jin; Chairman and Chief Executive Officer of Goldman Sachs David Solomon

(From left to right) Nicolas Aguzin, Chief Executive Officer of the Hong Kong exchange group; Joseph Bae, Co-Chief Executive Officer of KKR; Jin Liqun, President and Chairman of the Board of Directors of the Asian Infrastructure Investment Bank; Anand Selvakesari, Chief Executive Officer of Citigroup's Personal Banking and Wealth Management; Hanneke Smits, Chief Executive Officer of Newton Investment Management

UBS Group: Asia is the future focus rise area

Sergio Ermotti, the Chairman of UBS Group, stated that he does not agree with controlling tariffs and believes that Asian economies can mitigate the impact of tariffs on the economy through different measures. Globalization will not reverse, but each region will strengthen regional ties.

He added that after UBS merged with Credit Suisse, it has set a long-term development strategy, with Asia being the key rise region in the future. Earlier, mainland officials indicated that they would support the development of asset and wealth management business in Hong Kong, which is believed to give the outside world more confidence in capturing the huge wealth management opportunities in the mainland through Hong Kong.

Speaking of future risks, Kelleher said that on the one hand, we need to pay attention to the market changes brought about by artificial intelligence (AI), and also to follow financial market activities outside the jurisdiction of traditional regulatory agencies, such as the potential risks of the Cryptocurrency market that need to be closely followed.

CSRC: Facilitating Cross-border Investment While Ensuring Stability and Soundness

Chairman of the China Securities Regulatory Commission (CSRC), Wu Qing, also stated that the CSRC will continue to promote development and stability through reform, focus on improving the coordination between investment and financing functions in the Capital Market, accelerate the formation of a multi-level market system that supports technological innovation, support long-term investment policies, strengthen regulatory mechanisms to prevent risks, take multiple measures to enhance investor protection, and continuously enhance the attractiveness, competitiveness, and internal stability of the market.

He said that CSRC will anchor the goal of high-level institutional opening, adhere to coordinated development and security, unswervingly deepen the two-way opening of the capital market, and further facilitate cross-border investment.

One is to further maintain smooth channels for overseas financing and further enhance the efficiency of filing for overseas listings, actively supporting qualified domestic companies to list overseas, and making better use of the resources of the two markets.

Second, continue to expand the interconnection with overseas markets, expand the scope of Shanghai-Hong Kong Stock Connect, expand the interconnection of multiple certificate deposits, and attract global long-term funds. Third, deepen the opening up of the bond market, steadily expand the opening up of commodity and financial futures markets, better meet the diversified investment choices of international investors, and the needs of Risk Management. Fourth, carry out in-depth cross-border supervision and law enforcement cooperation in the securities and futures markets, continue to strengthen regular communication with international investors, effectively enhance the stability, transparency, and predictability of policies, and continuously improve the convenience for foreign institutions to operate in China.

Wu Qing stated that with a series of incremental policy measures gradually being implemented, further improvement in institutional reform, and solid advancement in the comprehensive deepening reform of the Capital Market, the underlying logic of the Capital Market's long-term positive trend will become more solid, and it will better serve the overall modernization development of China. He also mentioned that the CSRC will adhere to the principle of seeking benefits and avoiding harm, highlight fair regulation and development, and timely improve relevant institutional rules and regulatory measures for stock reduction, quantitative trading, securities lending, etc.

Zhu Hexin, Deputy Governor of the People's Bank of China and Director of the National Forex Administration, stated at the summit that the effects of the recently introduced policies are beginning to show. First, the Central Bank has recently lowered reserve requirements and interest rates, reducing the financing costs for enterprises and credit costs for residents, which is conducive to promoting consumption. Second, the Central Bank has lowered the interest rate on existing housing loans, resulting in an increase in house viewing activity and transaction volume. Third, policies promoting convenient swaps and increased loans for stock repurchases have been implemented, enhancing the confidence of investors in the stock and bond markets.

People's Bank of China & Foreign Exchange Bureau: Deepening Interconnection of Financial Markets in Two Regions

Zhu Hexin said that next, the People's Bank of China and the State Administration of Foreign Exchange will continue to deepen the interconnectedness of the Mainland and Hong Kong financial markets, continue to increase financial support for the construction of the Guangdong-Hong Kong-Macao Greater Bay Area, and consolidate and enhance Hong Kong's status as an offshore RMB business hub and international financial center. He said that first, we should make good use of the existing policies, then combine the construction of Hong Kong's international financial center, changes in the international financial environment, further promote high-level institutional opening in the financial field on the basis of adhering to marketization, rule of law, and internationalization, and continuously improve the facilitation of cross-border trade and investment and financing services for the real economy.

In addition, Zhu Hexin mentioned that over 200 QDII have been approved, with a scale of over $160 billion, which effectively supports domestic investors in asset allocation.