China’s bank regulator gives a vote of confidence to Hong Kong’s ‘vital and indispensable’ role as Asia’s financial hub
- Hong Kong is vital to China development in many aspects, CBIRC chairman Guo Shuqing said
- Hong Kong is vital in the Chinese economy’s dual-circulation development and as the offshore centre for the internationalisation of the yuan, he said
Hong Kong has a vital and indispensable role to play in China to facilitate the economy’s so-called dual circulation development, as well as in the internationalisation of the yuan and the growth of the Greater Bay Area, said the country’s bank regulator.
Hong Kong is “indispensable in many aspects” in China’s trade, investment, finance, legal, tourism and cultural activities, “so it is necessary for Hong Kong to further strengthen the cooperation and collaboration with the mainland,” said Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission (CBIRC), in a keynote speech during the Asian Financial Forum (AFF).
“Hong Kong is vital to China’s new development pattern of dual circulation,” Guo said in his televised speech, delivered in English. “Hong Kong connects China’s domestic and international circulations.
The GBA is a cluster of 11 cities in southern China’s Guangdong province – including Hong Kong and Macau – that forms the nucleus of one of the world’s fastest-growing economic regions. With a combined population of 70 million people and an economy estimated at US$1.65 trillion, the GBA will be the melting pot where three different currencies, economic and legal systems mix and mingle to lead the next phase of China’s economic growth.
“Hong Kong and Shenzhen can support and benefit each other in digital economy, biomedicines and artificial intelligence,” Guo said.
“As an offshore financial centre, Hong Kong can better participate in China’s opening up, and can also steadily promote [the renminbi’s] internationalisation,” Guo said, adding that China will further improve several of the Connect cross-border investment schemes between Hong Kong and the stock markets of Shanghai and Shenzhen. A bond connect scheme was introduced in 2017 to let foreign investors tap China’s bond market via Hong Kong.
“The National Security Law put an end to the violence and turmoil which were called ‘a beautiful sight to behold’ by some Western politicians,” Guo said. “It also dealt a heavy blow to anti-China forces and separatists. It provides a strong guarantee for social stability in Hong Kong.”
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Guo also rejected the international negative remarks about China’s state capitalism.
“This is a big misunderstanding,” he said, as the private sector now accounts for 60 per cent of China’s economy and it has the widest range of industries in the world.
Its regulation has protected the interests of labour force, Guo said, a remark obviously to hit back on US and British on banning products import from China for alleged using forced labour.
By 2035, China will achieve what Marxist-Lennist politico-economic theorists call “socialist modernisation,” a status in development theory that translates to a moderately developed country in terms of per capita GDP, and a country with established rule of law, Guo said.
“It would be a huge disaster if China and other Asian countries reached modernisation in the same way as Europe, US and Japan,” he said. “Over-exploitation and an increasingly fragile environment have already sent out warning signals. In the past two decades, frequent infectious diseases were probably related to expanded human activities,” he said.
It is therefore China will develop its economy in a “green” way of using less energy and reduction of pollution.