Fillip for HK international finance role
Beijing signals city has won duel with Shanghai, analysts say
The central government aims to take further steps to reinforce Hong Kong's role as an international financial centre, signalling its intention to highlight the city's importance to China's economy ahead of the 10th anniversary of the handover.
Analysts saw Beijing's efforts to promote Hong Kong's role as a setback for Shanghai, whose leadership has been hit by a series of corruption scandals culminating in the sacking of its former party secretary, Chen Liangyu .
Zhou Xiaochuan , governor of the People's Bank of China, yesterday revealed the mainland's regulatory agencies in charge of banking, securities and insurance had put forward proposals to boost financial co-operation between Hong Kong and the mainland.
Mr Zhou said this followed mainland leaders' decision at the national financial work conference two months ago to reinforce Hong Kong's role as an international financial centre.
At the conference, leaders discussed a Hong Kong government report, compiled in response to the mainland's 11th five-year plan, which looked at ways of integrating the city's economic development with that of the mainland.
'The central financial work conference attached great importance to Hong Kong's status and its role as an international financial centre,' Mr Zhou said.
His remarks appeared to confirm that Beijing endorsed the main thrust of the report.
It is expected to announce more favourable policies soon, probably before the July 1 handover anniversary. The central bank said in January that it would further expand yuan business in Hong Kong, and referred specifically to allowing mainland financial bodies to issue yuan-denominated bonds in the city.
'This work is actively being prepared and I think [details] will come out soon,' Mr Zhou said yesterday.
Zhao Xijun , deputy director of the Financial and Securities Research Institute of Renmin University, said Hong Kong's mission was to become an international financial centre on a par with New York and London, whereas Shanghai was still a long way from being a financial centre.
Zhong Wei , director of the Financial Research Centre at Beijing Normal University, said the central government had recognised Hong Kong's irreplaceable role in the country's financial reforms.
'The conclusion to the decade-long debate on the role between the twin cities has become clear now. Hong Kong, with its existing advantages, should serve China internationally, while Shanghai, with its limitations, should focus on serving the domestic market,' Professor Zhong said.
