KC Chan on renminbi globalisation

KC Chan, Hong Kong’s secretary for financial services and the treasury, discusses the opportunities and challenges arising from the renminbi’s development.

Speaking at an event in Hong Kong hosted by the UBS International Centre of Economics in Society at the University of Zurich, keynote speaker KC Chan, Hong Kong’s secretary for financial services and the treasury, gave his views on the recent liquidity crunch in China and the liberalisation of the renminbi:

In Hong Kong, we are affected directly by what happens in China. The Chinese government’s actions will be beneficial to Hong Kong including: reining in shadow banking in China; continuing to implement structural reform; and changing the economic model. These are challenging tasks but I believe the government will be able to pull them off in order to achieve sustainable growth in China.

Last year, the financial sector in Hong Kong has not done as well as we would have wished due to the uncertainty arising from the QE and the China economy. But I strongly believe that both China and Hong Kong will do well as the China leadership has the experience and track record to deal with difficulties and challenges in the market.

The liberalisation of the capital account and capital market in China will be a win-win situation for markets in both mainland China and Hong Kong. If Hong Kong wants to become one of the top three financial centres in the world, we need China to open up its market so that Hong Kong can tap into the market opportunities and further strengthen its position as an international financial centre.

Hong Kong has played a key role in the development of China’s financial reform program including the establishment of the H-share market 20 years ago, the listing of state-owned enterprises in Hong Kong, which began some 10 years ago. We believe that Hong Kong will continue to play a significant role in China’s liberalisation of the capital account and the renminbi.

With a strong infrastructure and legal framework, Hong Kong is best placed to provide intermediation for China to help investors and companies as they go out to the international market. Therefore, the Hong Kong Government is poised to further strengthen the wealth and asset management industries in Hong Kong. Hong Kong has been in a very fortunate position to be helping Chinese companies raise capital, the next important development would be to help Chinese individual investors and companies manage their money and foreign investments. We are currently in discussion with the regulators and authorities in China to help realise this goal.


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