The China Banking Regulatory Commission’s decision to widen the scope of investment under the Qualified Domestic Institutional Investors (QDII) program highlights the fact that Hong Kong is a principal international financial center in China, according to Hong Kong Financial Secretary Henry Tang.
Mr. Tang said the arrangement facilitates the dual-direction flow of capital between the Mainland and Hong Kong.
It also shows Hong Kong has a world-class financial services platform that can offer a wide spectrum of financial services to the Mainland. This increases the outward mobility of Mainland investors and financial intermediaries, alleviating in an orderly manner some of the country’s external imbalances, he added.
Mr. Tang said the commission’s decision is a practical response to the action agenda on China’s “11th Five-Year Plan” and Hong Kong’s development.
Since the Hong Kong Special Administrative Region Government announced the action agenda earlier this year, it has started a series of follow-ups, including holding in-depth discussions with businessmen and talking to Mainland authorities to work out the proposals, he noted.
On financial services, the government proposed to develop a cooperative, complementary and interactive working relationship between Hong Kong’s and the Mainland’s financial systems.
According to Mr. Tang, the public believes the QDII expansion will ensure an orderly outflow of funds from the Mainland. He said the move will bring Hong Kong banks and the finance industry more business opportunities, enhance the cooperation and development of Mainland and Hong Kong financial institutions and consolidate the city's status as an international financial center.
It also gives more opportunities for making best use of Hong Kong’s advantages to facilitate and complement the Mainland’s development needs, he added.
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