On 16 October 2024, the Chief Executive of the Hong Kong Special Administrative Region of the People’s Republic of China, Mr Lee Ka-chiu, delivered his third Policy Address during his tenure, proposing to continue deepening reforms, giving full play to the advantages of ‘One Country, Two Systems’, consolidating and enhancing Hong Kong’s status as an international financial, shipping and trading centre, supporting Hong Kong to build an international hub for high-calibre talents; deepening co-operation in the Guangdong/Hong Kong/Macao Greater Bay Area, and strengthening the convergence of regulations and mechanisms.
To strengthen its position as an international asset and wealth management centre, the Hong Kong Government continues to put in more efforts.
At present, there are 2,700 single-family offices in Hong Kong, and some in the industry expect Hong Kong to become the world’s largest cross-border wealth management centre by 2028. The Hong Kong Government is fully committed to promoting the management of more global funds in Hong Kong, including facilitating the development of new sales channels for private equity funds through the Hong Kong Stock Exchange (HKEx):
- Optimising the New Capital Investment Entrant Scheme (NCIES): with immediate effect, investment in residential properties with a transaction value of $50 million or above is allowed, and the amount of real estate investment countable towards total capital investment capped at $10 million. In addition, with effect from 1 March 2025, investment through qualifying private companies wholly owned by the applicant can be counted as part of the qualifying investment amount.
- Expanding the scope of tax concession: The Government will consult the industry to increase the types of qualifying transactions for tax concession for funds and single-family offices, so as to attract more asset management companies to settle in Hong Kong.
- ‘Belt and Road’ Sovereign Fund Co-operation: We will seek to co-operate with major sovereign funds in the Middle East and other regions to jointly set up funds to invest in assets in the Mainland and other regions.
- promoting the development of new distribution channels for private equity funds through the HKEx to enable investors to make more diversified asset allocations.
It will also continue to actively expand and deepen its overseas network, including financial co-operation with the Middle East and the ASEAN region, organising more international financial events, and seeking further co-operation with the Islamic market in the financial sector.
Deepening ‘Mutual Market Access’ and Enriching Offshore RMB Businesses
The Hong Kong Government continues to optimise the ‘Mutual Market Access’ mechanism to strengthen its position as the world’s largest offshore Renminbi (RMB) business hub and facilitate the internationalisation of RMB. Key measures include:
- Continuously upgrading the infrastructure and upgrading the Central Moneymarkets Unit to enable international investors to settle various types of assets in different currencies;
- enhancing the foundation of the fixed income market, e.g. setting up a central clearing system for RMB-denominated repurchase transactions and making Mainland government bonds issued in Hong Kong a more popular collateral in the offshore market;
- to continue to explore and optimise the ‘Cross-boundary Wealth Management Connect Scheme’;
- to increase offshore RMB liquidity and utilize the currency swap agreement between the HKSAR and our Country, so that the Hong Kong Monetary Authority can better support the development of Hong Kong’s economy and trade; and to enhance the night-time cross-boundary service capacity of Hong Kong’s RMB Real Time Gross Settlement System to facilitate global settlement in the offshore RMB market, and so on;
- to provide more RMB-denominated investment products, e.g. encouraging more listed companies to increase the number of RMB stock trading counters, expanding the issuance of RMB bonds, striving for the expeditious launch of offshore RMB sovereign bond futures in Hong Kong, and expanding the capacity of the Bond Connect (Southbound Trading) with the Mainland.
On the personal front, the Hong Kong Government will promote the interconnection of the Faster Payment System with the Mainland to facilitate real-time cross-border payments of small amounts of the two places. At the same time, the Hong Kong Monetary Authority will work with the relevant Mainland authorities to implement the issuance of bank cards in the Mainland by Mainland branches of Hong Kong-registered banks.
Hong Kong is the world’s third largest international financial centre and ranks first in terms of investment environment. The various measures proposed in this Policy Address for the benefit of Hong Kong are believed to enable the Hong Kong economy to flourish and reach new heights.
Attachment: The Chief Executive’s Policy Address 2024