China's NDRC urges firms to use Hong Kong for financing local projects, overseas plans
China's top economic planner is encouraging more mainland companies to leverage Hong Kong's international financial platform for cross-border financing activities to fund projects at home or expansion overseas.
Asia's leading financial hub - the biggest offshore yuan centre - can help onshore companies broaden their funding channels and optimise their financing structures, according to a top official at the National Development and Reform Commission (NDRC).
"Hong Kong serves not only as the nexus connecting the mainland and international capital markets, but also the premier platform for the mainland's 'attracting foreign investment' and 'going global' strategy," said Zheng Chiping, director general of the Department of Foreign Capital and Overseas Investment.
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China lauds Hong Kong's efforts to help mainland enterprises raise funds through bond sales, with a view to collectively foster a more open, transparent and efficient financing environment, he added.
Hong Kong's stock exchange has become a more active venue for fundraising by mainland companies this year. Photo: Eugene Lee alt=Hong Kong's stock exchange has become a more active venue for fundraising by mainland companies this year. Photo: Eugene Lee>
The NDRC also supports "active participation" by global investors to create "mutual benefits" with local firms, Zheng said.
He spoke at a seminar co-organised with the Hong Kong Monetary Authority (HKMA) on Tuesday. The event was attended by about 200 mainland enterprises, industry associations, financial institutions and law firms.
The seminar has helped deepen the understanding of government policies, which is conducive to better supporting mainland enterprises' cross-border financing activities in Hong Kong, HKMA CEO Eddie Yue Wai-man said.
It will further boost the internationalisation of yuan and the region's green and low-carbon transition, he added.
Hong Kong overtook Singapore as Asia's top financial centre, according to the Global Financial Centres Index, after losing the crown in 2022.
The rebound underscores the city's extraordinary advantage as a "superconnector" to China, supercharged by the steady integration into the Greater Bay Area, a government official said.
Hong Kong is looking to incorporate more risk-management tools into the various Connect schemes to meet the needs of investors, Financial Secretary Paul Chan Mo-po said at a summit in Shanghai earlier this month.
These tools will better connect Hong Kong and mainland China's financial markets, he added.
Chan did not provide specifics on possible market-liberalisation measures that could impact cross-border trading of financial instruments via the schemes.
The city's role as a bridge between the mainland and global markets would be enhanced because of new plans for the Connect schemes, he indicated.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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