Press Release - August 23, 2005

With China steadily integrating into the global arena in trade, investment and finance, Hong Kong is positioning itself well to make the best of the opportunities that come along with the economic liberalization and globalization of Mainland China.

Speaking today (Tuesday) at the 2005 Economic Outlook/Policy Forum sponsored by the Canadian Association for Business Economics held in Kingston, Ontario, Ms Elley Mao, Principal Economist of the Hong Kong Special Administrative Region (HKSAR), told a group of Canadian economists from the public and private sectors that Hong Kong would stay competitive by re-orientate and broaden its role to meet the changing needs of Mainland China.

In a speech entitled “Economic Development and the Outlook for China and Hong Kong”, Ms Mao told the 50 forum participants that while Hong Kong has always been a partner to all these changes in Mainland China, it is no longer the exclusive “gateway” to the increasingly more opened China market, and that Hong Kong is presented with the opportunities and challenges arising from the situation.

“To ensure that Hong Kong can stay competitive and continue to clinch a close partnership relation with the Mainland in its future economic growth and development, it has to re-orientate and broaden its role to meet the changing needs of Mainland China,” she said.

While China lacks a well-developed financial system to promote economic diversification, and prudent risk management to ensure financial stability and sustainable growth and development, Ms Mao said that Hong Kong has a sound legal system, well regulated markets, and good knowledge of modern management principles, as well as international business standards and codes of behaviour. She said with these advantages, Hong Kong could assist China to establish a more “rule-based” market system to replace the “relationship-based” practice in the past.

With China opening up its service industry, Ms Mao said there was a rising needs for more sophisticated financial intermediation services where Hong Kong played a significant role by turning itself into a conduit of “quality” capital to stay competitive and ahead of other foreign investors in China.

“More than 300 Mainland enterprises are listed in the Hong Kong Stock Exchange and they together account for about 30% of the total market capitalization value. Hong Kong is thus an important fund raising centre for the Mainland enterprises.

“Moreover, listing in Hong Kong put these enterprises under the supervision of the Hong Kong authorities, and indirectly should help improve governance and elevate management standards in these enterprises,” Ms Mao explained.

She said the Hong Kong Stock Exchange ranked first in Asia and fourth in the world in terms of capital raised, and about 36 per cent of Hong Kong’s stock market turnover was generated by international investors. “It reflects a significant presence of foreign savings in the Hong Kong stock market.”

As a financial market, Ms Mao said that Hong Kong offers unrivaled competitive edge in liquidity, talents, knowledge, international experience, corporate governance, transparency and property rights in Asia. More multinational companies had chosen Hong Kong as their regional headquarters and offices, which now reached more than 3,600.

Being seen by the Mainland Chinese enterprises as “a window to the world”, Hong Kong’s free flow of funds and information, freely convertible currency, and cross-cultural lifestyle are the major attractions to foreign companies and expatriates, concluded Ms Mao.

The two-day forum, entitled “Coming down the track – International financial influences on Canada’s outlook”, examined the key issues relevant to economists involved in forward-looking analysis. It provided an opportunity for Canada’s leading economic forecasters and policy analysts to focus on key influences on Canada’s international outlook.

The other speakers at the forum included former Governor of the Bank of Canada, Mr John Crow, and Chief Economist of the National Bank Financial, Mr Clement Gignac.

Ms Mao also gave a presentation on the “Latest Economic Developments in Hong Kong” this evening to representatives from different Chinese business associations and leading business Canadian bankers.


For further information please contact: Assistant Director (Public Relations), Stephen Siu at 416-924-5544 / [email protected] or Senior Information Officer, Elison Chu at [email protected]

Click here to download a Chinese version of this press release in PDF format.