Enhancing Capital Flow between Hong Kong and Mainland China: Insights from the China International Finance Forum

Enhancing Capital Flow between Hong Kong and Mainland China

At the China International Finance Forum held in Kowloon, experts urged for stronger policy initiatives to boost capital flow between Hong Kong, the Greater Bay Area, and the mainland. Norman Chan Tak-lam, former CEO of the Hong Kong Monetary Authority, stressed the need for innovation in capital circulation given the evolving geopolitical landscape. He proposed that linking Hong Kong with key hubs like Shanghai and Shenzhen is essential for strengthening external circulation.

Global Capital Investment Dependencies

Former CEO of Hong Kong Exchanges and Clearing, Charles Li Xiaojia, noted that current market conditions make a significant influx of global capital unlikely. He emphasized Hong Kong's unique position as a gateway for Chinese wealth and the importance of negotiating for a baseline allocation from global investors. Li suggested integrating initial public offerings (IPOs) into the connect program to maximize capital market opportunities.

Strategizing for Future Growth

David Liao, co-CEO of HSBC Asia-Pacific, indicated that Hong Kong has historically served as China's window to the world, especially for the financial sector. Liao reflected on recent capital outflows and the optimistic trend of restoring growth, asserting that capital will return when the market narrative is compelling. He acknowledged the potential for emerging markets to engage with China's capital through strategic links established in Hong Kong.