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China’s Bank Regulator Affirms Hong Kong’s Vital Role in the Chinese Economy

Hong Kong plays an indispensable role in the dual-circulation development of the Chinese economy, in facilitating the growth of the Greater Bay Area, and as the offshore financial center of the internationalization of the Chinese Yuan (RMB), said Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission (CBIRC), during the Asian Financial Forum (AFF). The speech by Guo is the most recent confirmation of the strategic importance of Hong Kong by a senior Chinese regulator.

According to Guo, Hong Kong is vital to China’s new development pattern of dual circulation. As the entrepôt of China’s domestic and international markets, Hong Kong is “indispensable in the international trade, business and investment activities of China,” affirmed Guo. Thus, “it’s necessary for Hong Kong to further strengthen its cooperation and collaboration with the mainland.”

Guo also discussed the prospect of Hong Kong as an organic part of the Greater Bay Area. In the presence of Shenzhen, the Silicon Valley of China, “Hong Kong and Shenzhen can support and benefit each other in digital economy, biomedicines and artificial intelligence,” Guo noted.

As the world’s largest offshore trading center for the Chinese Yuan (RMB), Hong Kong is also vital in the international circulation of the Chinese currency. As Guo pointed out, China will continue to improve the Connect cross-border investment schemes between Hong Kong and the stock markets of Shenzhen and Shanghai, which further assists foreign investors in entering the Chinese bond market via Hong Kong.

For more detailed information, check out the article of SCMP here (click).