Hong Kong is a forward-looking hub for businesses to capture new opportunities, such as those arising from the Belt & Road Initiative, Guangdong-Hong Kong-Macao Bay Area, fintech, infrastructure investments and financing and green finance.
The Belt & Road Initiative (BRI) builds connectivity, requires major investment and brings business opportunities. Thanks to its international expertise, experience and network, Hong Kong is the ideal platform for BRI investment.
The Greater Bay Area (GBA) comprises Hong Kong, Macao and nine Mainland cities along the Pearl River Delta. The combined GDP of the region amounted to US$1.5 trillion with a total population of 70 million. The initiative aims to ease the flow of factors of production, including people, goods, and money, across the Area with a view to fostering deeper economic and financial collaboration. GBA boasts the economically most vibrant and outward looking region in China with a budding innovative technology sector and Hong Kong as a mature and leading international financial centre. There is a lot of potential for Hong Kong's financial services sector to take advantage of the vast market and pilot liberalisation initiatives while servicing the burgeoning economic development in the Area.
Fintech is driving innovation in financial services globally and changing the nature of commerce and end-user expectations for payments and financial services. Against this background, the HKMA set up the Fintech Facilitation Office (FFO) in 2016 to facilitate the healthy development of the fintech ecosystem in Hong Kong and to promote Hong Kong as a fintech hub in Asia.
A growing number of companies have been looking into investments in infrastructure and related projects, which has been given further impetus by the BRI. This creates enormous opportunities in infrastructure financing. Hong Kong, being an international financial centre and China’s global financial centre, is uniquely positioned to facilitate the linkage between the significant funding needs of infrastructure projects especially in the emerging market economies and the vast pool of global capital that seeks to invest.
It is against this background that the HKMA established the Infrastructure Financing Facilitation Office (IFFO) in 2016 to facilitate investments and financing of sustainable infrastructure and green development by working with a cluster of key stakeholders, including multilateral development banks, financiers, investors, project owners, and professional service providers.
The functions of IFFO are to:
For more information, please visit the IFFO website.
Green finance has become a hot topic among the investment community. Having a deep, liquid bond market, Hong Kong is well positioned to grasp the opportunities brought about by green and sustainable finance. In particular, a number of initiatives have been launched to promote the development of the green bond market in Hong Kong, including the Government Green Bond Programme and Pilot Bond Grant Scheme.
To further support and promote Hong Kong’s green finance development, the HKMA unveiled three sets of measures in May 2019, including:
1) a three-phased approach to develop a supervisory framework for promoting Green and Sustainable Banking;
2) responsible investment by the Exchange Fund, particularly that the HKMA will adopt a principle that priority can be given to Green and Environmental, Social, and Governance investments if the long term return is comparable to other investments on a risk-adjusted basis; and
3) launch of the Centre for Green Finance (CGF) under IFFO, to serve as a platform for technical support and experience sharing for the green development of the Hong Kong banking and finance industry.
Please click here for further details of Hong Kong’s bond market development.