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International
Financial Centre
22.
As
an important pillar of our economy, the financial
services industry contributes directly around 13 per cent
of our GDP and employs more than 180 000
people. In 2006, Hong Kong ranked first in
Asia and second worldwide, ahead of New York, in terms of the total amount of funds raised
through initial public offerings in our stock
market. By abolishing estate duty and
exempting offshore funds from profits tax, we have
further consolidated our position as a major asset
management centre. Looking ahead, it is my
belief that the financial services industry will
become the most important sector in our economy.
23.
With
the Mainland's on-going modernisation process, its
demand for quality financial services will increase
substantially.
I therefore consider that this should create
ample room for our financial services industry to
develop in the years ahead.
A complementary, co-operative and interactive
relationship needs to be established between the
financial systems of the Mainland and Hong Kong.
We
have an advanced financial infrastructure, a
regulatory regime up to international standards,
deep and liquid internationalised financial markets,
a rich pool of professionals and diversified
investment products.
These advantages enable us to contribute to
raising the efficiency of financial intermediation
in the Mainland and facilitating reform of the
Mainland's financial system in the following ways:
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first, the
entry of Hong Kong's
financial institutions and professionals into the Mainland market will help upgrade the corporate governance
standards of Mainland enterprises,
introduce innovative financial products and
help enhance the efficiency of the Mainland's financial intermediation; |
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second, we can help Mainland enterprises raise
capital and reach out to the international market,
and provide a global investment platform for
Mainland funds. By further expanding our
Renminbi (RMB) business, Hong Kong can serve as a test bed for the use of RMB in
international trade and financial transactions.
Our sound financial system, coupled with
close co-operation between the regulatory bodies
of both places, can help manage the risks involved; |
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third,
Hong Kong and the Mainland can work together to establish
appropriate channels to allow cross-boundary
access to financial instruments issued in the two
markets. This
will help enrich the variety of financial
instruments available in each market and offer
investors more choice.
The greater
market size
resulting from such linkages will also enhance
market efficiency and liquidity. |
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24.
In
promoting the development of our markets, we will
explore ways to broaden the source of enterprises
coming to list in Hong Kong, in an effort to attract quality foreign
enterprises. To
meet the demand for risk management in Mainland
financial markets, we are also exploring further
ways to develop our derivatives markets, including
financial and commodity futures trading, and
insurance and reinsurance industries.
25.
As
regards improving our regulatory framework, Hong Kong
is one of the first places in the world to implement
the New Basel Capital Accord, which helps enhance
the banking industry's management of risk. In
addition, we will introduce a Bill into this Council
in the current legislative session to give statutory
backing to major listing requirements. We have
also established the Financial Reporting Council to
upgrade the regulation of the accounting profession
and the quality of financial reporting of companies
listed in Hong Kong. Furthermore, we have embarked on an exercise
to rewrite the Companies Ordinance to ensure that
our company law continues to serve Hong Kong's developing needs as a major international
business and financial centre. The Securities
and Futures Commission will also explore ways of
utilising part of its levy income to enhance
investor protection and education.
26.
By
complementing the financial development of our
nation and enhancing our own competitiveness as I
have elaborated, Hong Kong will flourish as a world-class international
financial centre for our nation and enhance the
latter's financial security in increasingly-globalised
financial markets.
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