HK urges co-op with Beijing on private capital

The 17th Beijing-Hong Kong Economic Cooperation Symposium was held on Wednesday and Thursday in Beijing. Investment from Hong Kong reached $3.1 billion in the first nine months, accounting for 40.7 percent of Beijing’s utilized overseas direct investment. [Cheng Gong / for China Daily]

Senior officials from Hong Kong said that Beijing and Hong Kong should cooperate to promote the involvement of private capital in the financial industry.

"Beijing and Hong Kong have many complementary qualities in the finance sector," said Secretary for Hong Kong Financial Services and the Treasury Bureau Chan Ka-keung, at the 17th Beijing-Hong Kong Economic Cooperation Symposium.

"Beijing as a base for venture capital has plenty of innovative technology enterprises that have a strong demand for funds, and Hong Kong is the center in Asia for venture investors.

"The private fund business will be an important means of financial cooperation between the two cities."

He added that Hong Kong is studying an arrangement that will offer a tax exemption for offshore funds to private investment firms.

"Mainland enterprises in Beijing can utilize the Hong Kong offshore yuan-denominated financing system to raise funds and hedge their financial risks," he said.

Experts said that private firms can also get a high return on investments in companies that conduct initial public offerings.

As of last month, there were 109 mainland companies listed on the Hong Kong Stock Exchange. They've so far raised about HK$413 billion ($53 billion), and their aggregate market capitalization is HK$872.3 billion.