Mainland Supports HK to Enhance Role as Financial Hub by Increasing Cross-Border Connectivity
Source: Global Times Published: 2020/11/25
The Central Government affirmed support for Hong Kong Special Administrative Region's efforts to enhance its position as a global financial hub via deepening connectivity with mainland financial markets, including incorporating tech shares into stock link programs. The plans for closer ties with the mainland were announced by Hong Kong SAR's Chief Executive Carrie Lam during a 2020 policy address on Wednesday.
Hong Kong's benchmark Hang Seng Index soared following Lam's speech, gaining 1.5 percent to 27,000 points, its highest point since February this year.
Lam confirmed the backing of the central government to increase the scope of qualified stocks under existing Hong Kong-mainland stock link mechanisms.
The Chinese Central Government has agreed to accelerate the development of stock link systems for certain sectors, including biotech companies listed on the Hong Kong exchange that are not yet profitable, in addition to firms listed on the science and technology innovation board.
Lam also revealed that a cross-border wealth management scheme will be implemented from the end of 2020 onwards. The scheme will permit residents in Hong Kong, Macao and nine designated cities on the mainland to buy financial products in each other's markets.
Hong Kong is seeking to strengthen cooperation with mainland financial markets at a time when its economy has been battered by the COVID-19 pandemic. This comes after the region's standing was also hit by the social instability that ravaged the city last year.
Lam's speech repeatedly addressed Hong Kong's economic crises, forecasting that the region's economic output will likely contract by about 6.1 percent this year.
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