Following is the speech by the Financial Secretary, Mr Paul Chan, at the Belt and Road Summit luncheon this afternoon (September 11):
Peter (Chairman of the Hong Kong Trade Development Council (HKTDC), Dr Peter Lam), Margaret (Executive Director of the HKTDC, Ms Margaret Fong), Mr Bi (Chief Executive Officer of China International Capital Corporation Limited, Mr Bi Mingjian), distinguished guests, ladies and gentlemen,
Welcome to the Belt and Road Summit luncheon on the first day of this seminal two-day gathering. I'm pleased to note that this fourth edition of the Summit has attracted a world of high-flying financial and business professionals alongside governmental and institutional leaders, each of you looking to find your place in the fast lane of the Belt and Road Initiative.
It was certainly a notable morning, with senior government officials from China, Cambodia, Hungary, Indonesia and the United Arab Emirates speaking, and ministerial leaders from Myanmar and the Slovak Republic soon joining us at the luncheon panel, sharing with us their unique insights on the Belt and Road Initiative.
Given today's volatile global economic and business environment, it is essential that we get a good diversity of viewpoints from policymakers, and financial and investment leaders, from all over the world. Essential, too, that governments and businesses, large and small, seek ways to collaborate, to discover, create and realise the many promising opportunities along the Belt and Road.
Allow me, for the next few minutes, to speak of Hong Kong, of our singular advantages in promoting multilateral economic co-operation generally and along the Belt and Road specifically.
The idea of the Belt and Road Initiative is premised on mutual benefits as well as connectivity in everything from trade and culture to governmental and people-to-people ties. Infrastructural development is a cornerstone of the Initiative. The vast, often multilateral, infrastructure projects underpinning the Initiative demand equally vast financing, which requires both public and private-sector investment to bridge the substantial funding gaps we are seeing.
The infrastructure funding needs in Asia alone will total US$1.7 trillion a year, on average, through 2030, according to the Asian Development Bank.
In this regard, Hong Kong, as one of the world's leading financial centres and China's international financial capital, can make a pronounced difference.
Our deep liquidity, outstanding financial infrastructure and wide-ranging options for raising capital - from initial public offerings and loan syndication to bonds and Islamic sukuk - can meet the financing needs of any Belt and Road project. Anywhere literally.
The huge demand for infrastructure investment has also stimulated innovation in infrastructure financing to expand lending capacity. Apart from providing financing for greenfield projects through the Infrastructure Financing Facilitation Office under the Hong Kong Monetary Authority and allowing brownfield infrastructure projects to be listed on our stock exchange, the Hong Kong Mortgage Corporation Limited, again under the Hong Kong Monetary Authority, is pursuing the proposition of securitising infrastructure loans to provide banks with the opportunity to offload their loans to long-term investors. After offloading, banks can then have more capacity to finance new infrastructure projects.
Hong Kong is also a green finance hub, capable of meeting the interests, and demands, of big-ticket green projects - from green finance certification to critical legal and marketing expertise and advice. Last year, Hong Kong arranged and issued US$11 billion worth of green bonds, tripling that of 2017.
The latest move to bolster our green finance development is the establishment of a Centre for Green Finance by our Infrastructure Financing Facilitation Office under the Hong Kong Monetary Authority. The Centre serves as a capacity-building platform for technical support and experience sharing for the green development of the Hong Kong banking and finance industry.
To learn more about how the Office can help and what incentives we offer to green bond issuers, join us at the thematic breakout forum on sustainable finance in infrastructure this afternoon at 4pm.
Investing in and financing complex projects in emerging markets involve a multitude of specialty risks. Hong Kong, a global risk-management centre and regional insurance hub, is home to an array of multinational insurers and reinsurers. They provide professional risk management services and insurance coverage that Belt and Road project owners can count on. They also offer reinsurance services to underwrite and manage project risks.
Last year, we reached an agreement with the China Banking and Insurance Regulatory Commission to lower the capital requirements of Mainland insurers who cede businesses to qualified Hong Kong reinsurers.
The agreement will reinforce Hong Kong's competitiveness as a risk management centre, enabling local reinsurers to take on Mainland reinsurance for Belt and Road projects.
If you would like to explore more of such potential, I invite you to join key insurance stakeholders in the Belt and Road Insurance Exchange Facilitation. The organisation, launched last year, promotes the exchange of intelligence, encourages alliances and facilitates networking.
And you are welcome to find out more at this afternoon's thematic breakout forum, hosted by our Insurance Authority.
Hong Kong is also an ideal choice for setting up a corporate treasury centre (CTC). We offer an extremely tax-friendly environment for CTCs, taxing their qualifying profits at a concessionary rate of only 8.25 per cent.
Last but not least, Hong Kong is the platform for high-end professional services. Our top-notch professionals in architecture, engineering, urban planning, surveying, financing, project management consulting as well as legal and dispute resolution have all the necessary experience and knowledge to lead Belt and Road projects, in ascertaining project feasibility, in implementing the project and in operating the infrastructure.
And with rich experience in innovative financing and city management, we are also prepared to share our knowledge and expertise with our Belt and Road counterparts in a variety of fields, such as airport management, railway financing and operation, emergency services, etc. The MTR Academy of our MTR Corporation and the International Aviation Academy of our Airport Authority, for example, have both been providing quality training to transport management talents worldwide.
Ladies and gentlemen, in every possible way, Hong Kong is here for you, and here to help you connect and excel along the Belt and Road.
Before I go, I'd like to touch on the disruption that Hong Kong has been experiencing over the past few months. The demonstrations and protests reflect complex issues. And they are concerning to us all.
But let me assure you that the recent incidents have not affected Hong Kong's core competitiveness, including the rule of law, free movement of capital, goods, information and people, freedom of expression, a simple and low tax regime, a sound regulatory system and an independent judiciary. The "one country, two systems" principle, which is the cornerstone of our economic success and long-term prosperity, remains intact. These fundamentals and institutional underpinnings of our society stay strong and resilient.
Going forward, we are earnestly engaging in dialogues with the community, with the aim of mending differences as well as looking for solutions. I believe that continued dialogue, conducted in the spirit of reason, mutual respect and reconciliation, together with the rule of law, will see us through the difficult times.
Ladies and gentlemen, I wish you the best of business at this year's Belt and Road Summit. And I encourage you to take some time out of your busy schedule to go try for yourself the "shop till you drop, and eat till you pop" kind of experience in our lovely city.
Thank you and bon appétit!
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