Speech by FS at Belt and Road Summit Luncheon
Following is the speech by the Financial Secretary, Mr John C Tsang, at the Belt and Road Summit Luncheon this afternoon (May 18):
Your excellencies, distinguished guests, ladies and gentlemen,
It is indeed my great pleasure to join you all here today for the luncheon of the inaugural Belt and Road Summit. This gathering actually puts a much-welcomed and most fitting spotlight on the spirit of this visionary initiative as well as Hong Kong's place in the overall scheme of things.
Indeed, this is the right moment as well as the right place for us to explore the outsized potential of the Belt and Road Initiative, and how we can work together to take advantage of the massive opportunities that this engenders.
I say this is the right moment because the global economy, as we speak, is facing substantial headwinds and downward pressure. Growth of economies around the world in 2016 will be constrained by the sluggish demand as well as the host of uncertainties on the financial, economic, social and political fronts.
As our speakers have succinctly pointed out in the morning sessions, the Belt and Road Initiative, spanning 60 more countries in three continents that count for 65 per cent of our planet's population, can indeed inject the much-needed impetus and direction into our global economy in the 21st century.
I say this is the right place because Hong Kong, with our unique strengths under the "one country, two systems" framework, has all it takes to play a central role in delivering and in realising the enormous potential of this initiative.
The Belt and Road Initiative is about integration, connectivity, trade and investment, as well as people-to-people bonding. As a truly globalised metropolitan centre at the heart of Asia, I believe, few can do better than us, few can do better than Hong Kong.
Our international and friendly business environment, our sound and robust market structure, our optimal mix of talents and cultures from the East and West, as well as our unparalleled connectivity with the rest of the world, make us the natural hub of the Belt-Road region, be it financial, business or trade.
It begins, of course, with the infrastructure projects that would serve to strengthen connectivity among economies along the twin corridors, in the form of railways, highways, ports, power plants and more. According to an Asian Development Bank statistic, Asia will need US$800 billion every year just to cover infrastructure investment needs from now to the year 2020.
As an international financial centre, Hong Kong has the requisite experience, we have the requisite expertise, as well as network to serve as the centre for the fundraising, project financing and asset-management for these big-ticket items.
Hong Kong currently runs one of the largest stock exchanges in the world. Last year, our stock market ranked first overall in equity funds raised through initial public offerings. We should be able to help meet much of the funding needs for the Belt-Road initiative.
Today, Renminbi liquidity in Hong Kong, which is the largest offshore pool globally, amounts to some RMB900 billion. Our available portfolio of services covers a broad, diversified and mature range, from personal banking and asset management to cross-border trade settlement and bond issuance.
Hong Kong's Renminbi bond market is the largest of its kind outside the Mainland. Our dim sum bonds, I should add, consistently attract an extensive range of issuers, including global institutions such as the World Bank and the ADB (Asian Development Bank).
The market potential of Islamic finance is also clear and promising, given the large Muslim population living in the Belt-Road region.
We have been working hard to develop Islamic finance. And we have made a good start of it. In the past 20 months, we have twice issued Islamic bonds, most recently this time last year. Both issuances were well received, demonstrating Hong Kong's capability in supporting Shariah-compliant financial products that meet specialised financing needs.
And, as I have indicated earlier this year, we shall be issuing our third sukuk in the foreseeable future.
While funding requirements for infrastructure projects along the Belt-Road region are sure to be substantial, we see a need to create a focal point here in Hong Kong that would help facilitate the concentration as well as precipitation of interest in promoting critical investments for the overall economic development of the entire Belt-Road region.
We are now in the final stage of establishing an Infrastructure Financing Facilitation Office under the Hong Kong Monetary Authority to pool together all the stakeholders from the public as well as private sectors on a common platform, where they can exchange timely information and share useful experience, with a view to facilitating co-operative efforts and efficient investments in the realisation of these projects. We expect the Office to be up and running in a couple of months' time.
The Asian Infrastructure Investment Bank (AIIB), which has just commenced operation in January this year, will be one of the key financial institutions backing the Belt-Road initiative. Hong Kong has been contributing to the establishment as well as the operation of the AIIB. I am sure that they will be looking to take good advantage of our expertise in different areas, from capital market financing and dispute resolution to project assessment as well as asset management.
Of course, there is much more that Hong Kong can offer. Our deep pool of world-class talents, in accounting, architecture, urban planning, engineering management and more, can certainly help meet the huge demand for high-end professional services arising from the planning, implementation and operation of the Belt-Road projects.
The legal profession is another compelling strength of ours. With the rule of law and our independent judiciary, Hong Kong's legal professionals are known to lead the field in conducting due diligence, ensuring contract enforcement and helping resolve disputes. These services will certainly come in handy when the projects are in full swing.
As an international business and trade centre, we are also proud of our transport network that is comprehensive, proficient and efficient. We are located within five hours' flying time of half the world's population. Each day some 1,100 flights connect Hong Kong with hundreds of key destinations around the world. And our airport and ports are among the busiest and most efficient out there.
Business conventions and exhibitions, some of which are the largest of their kind in the world, are staged also right here in Hong Kong, here in the convention centre. We are the premier platform for trade facilitation and business matching for the region.
Ladies and gentlemen, since the 2008 financial tsunami, the global economy has undergone sweeping changes. The emerging markets along the Belt and Road corridors are now playing a much more important and influential role as the global economic centre of gravity shifts towards the East. Hong Kong is now revving up our financial and business engines, and we are readying to take our place in the fast lane of the Belt-Road initiative. So join us on this exciting journey that promises to be full of rewards and full of opportunities.
Enjoy the luncheon and have a great day.
Thank you very much.
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