Hong Kong has much to offer as the world’s window into mainland China, and the global launching pad for the world’s second-largest economy, now that the city is gradually shedding the rules from three years of trying to contain the Covid-19 pandemic, bankers and financiers said. “The recent removal of quarantine policies support the long-term positioning of Hong Kong as a key financial gateway to mainland China,” said Andrew McCaffery, the chief investment officer of asset management at Fidelity International, which manages US$613.3 billion of assets. Hong Kong has “multiple strengths” that put the city in the position to play an important role in the Greater Bay Area (GBA), the cluster of 11 cities in southern China with US$1.7 trillion in combined economic output and 86 million people. “[Hong Kong is uniquely imbued] with a common law legal system and listing requirements, a beneficial position with access to the Greater Bay Area, strong financial expertise and a large talent pool,” McCaffery said. “All of these factors facilitate investment flows between Hong Kong and mainland China.” Hong Kong has been describing itself as the “super-connector” between China and the world under the Belt and Road Initiative (BRI), the GBA plan in 2019 and the recently formed Regional Comprehensive Economic Partnership (RCEP) with China, Japan, South Korea, Australia, New Zealand and members of the Association of Southeast Asian Nations (Asean). “To maintain its competitive edge, Hong Kong should accelerate its integration with the mainland to secure its role as the primary international capital markets for mainland Chinese companies,” said Anthony Siu, the Shanghai-based partner of BDA who advises on cross-border mergers and acquisitions, fundraising and financial restructuring. “Being at the forefront of financial product innovation for Chinese companies will be key to differentiating itself from regional and international markets.” “Hong Kong should enhance its understanding of the domestic China economy and its culture by promoting northbound talent flow, as well as immersion through early-year education in China,” Siu said. “The reverse is also true: by drawing mainland China talents to the city, Hong Kong can benefit from their language, culture and entrepreneurial spirit.” Powering through the headwinds, including the social unrest in 2019 and three-year Covid outbreak, that hit the city unprecedentedly , cross-border deal professionals see that investments flowing in and out China still prefers the city as a destination. “Chinese companies, particularly those with global ambitions, will continue to be drawn to Hong Kong because of access to a broad international investor base and deep capital pool,” said Baker McKenzie’s partner Tracy Wut, who advises on cross-border deals at the Chicago-headquartered law firm. “Hong Kong’s proximity to China, low tax rates, relatively simple tax system and well established financial infrastructure gives businesses the convenience and certainty they seek when conducting cross-border trade and investments.” Hong Kong’s “super connector” role can extends to yuan-related financial activities, given a shot in the arm in July when the Chinese central bank upgraded its yuan settlement programme with the city into a permanent arrangement, and increased the annual allocation by 60 per cent to 800 billion yuan (US$110 billion). “The availability and sizeable offshore liquidity pool in renminbi allows investors to buy renminbi-denominated assets efficiently, which is a unique position when compared to other financial markets in the region,” said McCaffery. Chinese companies involved in the BRI are focused on renminbi settlement and lowering exchange costs, said Li Haiying, managing director of the renminbi business at the Bank of China (Hong Kong), one of the city’s three currency issuing banks. “[Hong Kong] can support these countries to build the market infrastructure for the renminbi and cater for the renminbi needs of corporations and people in the region,” Li said. Hong Kong applied to join RCEP in February. Trade volumes between the financial hub and RCEP members account for 70 per cent of the city’s total. “Our India team sits right next to our China and Japanese stock market teams. They’re all there learning from each other and sharing ideas with each other. Hong Kong is “the place where people can have the best exposure to the East,” said Mary Callahan Erdoes, CEO of JP Morgan Asset & Wealth Management. “There has not been a city in the east that has emerged in the same way that Hong Kong has to be that melting pot.”