Policy Address

Financial Co-operation with the Mainland

100.     Strengthening our financial co-operation with the Mainland is vital for our financial services.  These services should be positioned and developed in a way that will increase our contribution to promoting the modernisation of the Mainland's financial system, particularly the internationalisation of the RMB and the increased convertibility of the Mainland's capital account in a gradual and orderly manner.  We have the following four short-term goals:

(1)        To seek “early and pilot implementation” in Hong Kong of those Mainland financial services which have not been liberalised because the capital account is not yet opened or it is necessary to test the market through piloting.  For example, we may seek the expansion of channels for enterprises to invest in the Mainland the RMB capital raised in Hong Kong;
(2)        To promote capital flows between banks in Hong Kong and the Mainland, and to attract more foreign enterprises to use Hong Kong's RMB settlement services by taking advantage of the development of cross-border trade settlement in RMB;
(3)        To encourage more Mainland, Hong Kong and foreign enterprises to issue RMB bonds in Hong Kong; and
(4)        To strengthen the linkage between products traded on the stock exchanges of Hong Kong and the Mainland, seek mutual access for market participants and intermediaries, and expand the channel for capital flows between the two places.

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