Business community gives nod to new measures
Updated: 2011-08-18 22:16
By Li Tao (chinadaily.com.cn)
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Hong Kong's business community welcomed the central government's new support measures that are expected to give a strong uplift to the Hong Kong economy. Business leaders predict that the city's financial and service sectors will be strengthened significantly.
During his three-day trip to the special administrative region, Vice-Premier Li Keqiang announced an agenda of over 30 measures to boost the local economy. The measures are intended to boost the city's role as a global financial center even further, while helping it to develop as a leading international offshore centre for trade in the yuan. Another objective is to enhance two-way investment and trade between Hong Kong and the mainland.
These measures will encourage Hong Kong companies to invest on the mainland by using yuan directly and will also allow qualified foreign institutional investors to buy mainland securities up to a total of 20 billion yuan. Those measures, according to the international bank Credit Suisse, "are important steps to allow offshore yuan to be channeled back onshore, for investment purposes, and are integral to the ongoing yuan internationalization process and the development of Hong Kong as a yuan offshore center."
Hong Kong-based Hang Seng Bank Ltd., backed by HSBC Holdings Plc, said it welcomes the central government's pledge to deepen the economic and trade cooperation between the mainland and Hong Kong.
"To the local lenders in Hong Kong, these new measures, announced Wednesday, will bring more business opportunities in their Hong Kong and mainland business," said Margaret Leung, Chief Executive Officer of Hang Seng Bank.
Leung expressed her belief that more diversified investment channels will be created after the mechanism regulating the flow of yuan between the two sides is relaxed further. That will also promote cross-border trade, finance and business development in yuan in the future.
These measures supporting development of an offshore yuan trading centre and international asset management centre, will also benefit the city's hundred-thousand small and medium enterprises (SMEs), according to Anthony Wu, Chairman of the Hong Kong General Chamber of Commerce (HKGCC).
"Hong Kong's development as an offshore financial center will help SMEs lower the cost of cross-currency transactions," said Wu.
"The increases in options for yuan-denominated investment instruments, in addition, will also help SMEs better manage their cash flows and exchange rate risks," he added.
New measures announced Wednesday also lowered thresholds for Hong Kong's professional services to enter the mainland. Hong Kong travel agencies are being encouraged to set up shop on the mainland.
HKGCC's Wu believes the sum of the measures indicate that the central government has clearly recognized Hong Kong's advantages in terms of finance, service, talent and institutions. He said the measures will provide a great boost promoting a closer economic and trade relationship, as well as to enhance Hong Kong's competitiveness.
James Tien, Chairman of the Hong Kong Tourism Board said the new policy is encouraging to the entire industry. It will not only mean more business opportunities to local travel agencies but likely will resolve problems like "zero-fee" tours that have damaged the reputation of the Hong Kong industry.
The central government will also implement measures to encourage greater cooperation between mainland and Hong Kong enterprises and to take advantage of opportunities in the international market, under the new measures.
Roy Chung, Chairman of Federation of Hong Kong Industries said the community welcomes the measures in particular under the current uncertain global economic environment. He said he expects the central government's firm support will help the territory to repel a possible new round of economic fluctuations in the outside world.
"Apparently Hong Kong's unique status to China has been consolidated," Chong Tai-leung, Professor in the Department of Economics of The Chinese University of Hong Kong, told China Daily.
Li, the Vice-Premier who is in charge of economic affairs in China, paid a three-day trip to Hong Kong and announced a series of good news measures to boost the city's economy. Chong said the initiatives show the world that Hong Kong's role as a yuan trade hub have been firmly established and further cooperation between the mainland and Hong Kong is expected, said Chong.
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