Special interview
Author: Hu Xueneng
2020-12-11 07:00
Last update date: 2020-12-11 07:00
When attending a meeting to celebrate the 40th anniversary of the establishment of the Shenzhen Special Economic Zone in October this year, President Xi Jinping said that the construction of the Guangdong-Hong Kong-Macao Greater Bay Area is a major national development strategy and Shenzhen is an important engine for the construction of the Greater Bay Area.
Chief Executive Carrie Lam Cheng Yuet-ngor once said that Hong Kong and Shenzhen will join forces to achieve new and greater achievements.
In an interview with "Hong Kong 01", the Chief Executive Officer of the Financial Development Bureau, Ou Jinglin, believed that the rapid development of financial technology has become a place where Hong Kong and Shenzhen can "join together". Hong Kong can play the role of "converter" and export Shenzhen's finances. Technology (FinTech).
He also admitted that there is a political risk of sanctions against Hong Kong's financial industry, but believes that for investors, the risk may not be decisive in investment considerations.
There are opinions in the market that they are worried about whether the Central Power Valley Shenzhen will weaken the status of Hong Kong, or even say that Shenzhen will replace Hong Kong.
Ou Jinglin pointedly pointed out that he was worried about the wrong thinking. He said that the relationship between Hong Kong and Shenzhen is closely related. Hong Kong is also the source of Chinese and foreign direct investment in Guangdong Province. He cited statistics from the Mainland. As of the end of 2018, Hong Kong’s actual direct investment in the Mainland The cumulative investment amount has exceeded US$1 trillion, accounting for more than half of the total value of inward foreign direct investment.
Among the mainland provinces, Guangdong and Hong Kong have the closest economic ties.
In 2018, Guangdong Province actually used Hong Kong businessmen to invest more than 99.5 billion yuan in direct investment, accounting for 68.6% of the province. Hong Kong is the only Guangdong Province’s largest export market, accounting for 26.7% of their total exports.
Ou Jinglin pointed out that Shenzhen attracts many well-known technology companies and talents to take root, which is conducive to the development of financial technology.
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The advantages of Hong Kong and Shenzhen can be connected to achieve synergy
Ou Jinglin pointed out that Hong Kong's financial status is beyond doubt, while Shenzhen attracts many well-known technology companies and talents to take root, which is conducive to the development of financial technology, and can connect with Hong Kong's advantages and exert synergy.
He analyzed that Hong Kong played a role in connecting the international market in the application of technology to finance. Under one country, two systems, Hong Kong’s legal mechanism follows the common law, which is highly recognized in the international market and is Hong Kong’s advantage. The operation of the market is very mature, and the tax system is relatively simple. It is a good "translator", "You have created some new technologies, but how do you apply them to overseas markets and users? Hong Kong is playing a role. Many foreign companies The advantage of setting up a branch in Hong Kong is that everyone is familiar with the language and legal system, and there is no need to know a new one."
He pointed out that Shenzhen is ahead of Hong Kong in terms of financial technology, but it may need to use technology or raise funds in the international market. It can cooperate with Hong Kong, and Hong Kong can also guide foreign funds into Shenzhen, and technology and financing are also related. Under the system of same shares with different rights, Hong Kong has attracted many large technology stocks from the Mainland to come to market, and the amount of biotechnology fund-raising is also ranked second in the world, which can guide foreign capital to invest in China.
Ou Jinglin reiterated that the roles of Hong Kong and Shenzhen are very clear. Hong Kong is an international financial center that connects capital flows. Shenzhen is a successful technology, finance, and trade city in the Mainland. Therefore, Shenzhen should be "bigger". The key is that when Shenzhen’s market becomes larger, Hong Kong will benefit more.
"The framework of the Greater Bay Area provides greater flexibility for the development of Hong Kong and Shenzhen. For example, some policies and concepts are first tested in the Greater Bay Area, and then successful experience can be applied to other areas in the Mainland, and it can also be radiated to Overseas market, so it is a win-win situation!"
Ou Jinglin said that Hong Kong's legal mechanism follows the common law, which is highly recognized in the international market and is Hong Kong's advantage.
(Photo by Zheng Zifeng)
Political risks in Hong Kong's financial industry bring opportunities
Although Hong Kong is good at acting as an intermediary, the international situation this year has been treacherous and changeable. In response to Beijing's implementation of the "Hong Kong National Security Act" in Hong Kong, the United States sanctioned many Chinese and Hong Kong officials, which cast a haze over Hong Kong's financial environment from being suppressed by the United States.
On the other hand, Ou Jinglin believes that “only when there is danger is organic.” The impact of the Hong Kong financial market under the epidemic this year has been much milder than that of other industries. Companies are returning to Hong Kong. Some mainland companies think that it is better to raise capital in Hong Kong without going to the United States, so that Hong Kong will benefit."
He admitted that there is a political risk of sanctions against Hong Kong's financial industry this year. "Maybe everyone would not think about this before, but now there is more consideration when investing. But is this a decisive consideration? I don't think it is necessary." He pointed out that investment and business management are bound to be exposed to different risks. This requires finding a balance, and also weighing the magnitude of the risk and the impact behind the risk.
"Because Hong Kong is an international financial market, it does not have only one trading partner, so anything that happens will become an international issue. If suddenly there is a major change in Hong Kong's financial market, (because) multiple existing interconnection mechanisms involve overseas Funds are not only affected in Hong Kong, but many investors around the world are affected."
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