A ferry crosses Victoria Harbour in Hong Kong on Nov 13, 2021.
(BERTHA WANG / AFP)
Measures announced by Hong Kong’s finance chief in his latest 2022-23 Budget will make Hong Kong play a bigger role in global green finance development and help the city further strengthen its status as an international financial center, banking heavyweights said.
In his speech delivered online on Wednesday, Financial Secretary Paul Chan Mo-po announced that green bonds totaling about $4.5 billion will be issued this year under the Government Green Bond Programme. Since the launch of the program in 2018, a total of more than $7 billion equivalent of green bonds targeting global institutional investors has been issued.
Apart from developing the bond market, financial chief Paul Chan also pledged to further expand channels for the two-way flow of cross-boundary renminbi funds and promote the development of offshore renminbi products
For retail investors, no less than HK$10 billion ($1.28 billion) worth of green bonds will be issued in the next financial year, Chan said. He also proposed to issue no less than HK$15 billion of inflation‑linked retail bonds and HK$35 billion of Silver Bonds.
INFOGRAPHIC: HK 2022-23 Budget at a glance
Apart from developing the bond market, Chan also pledged to further expand channels for the two-way flow of cross-boundary renminbi funds and promote the development of offshore renminbi products. Mutual access with the mainland financial market will also be deepened, he said.
With moves to promote cross-border financial connectivity and transformation of market structure, Hong Kong’s role and function as the international financial center of the country have been further enhanced, Chan said in his budget speech.
“Under the ‘dual circulation’ strategy, our country's continuous reform, high-quality two-way opening up, ongoing renminbi internationalization and transformation to a green and zero-emission economy have brought us new missions and opportunities,” he said.
“Hong Kong has to proactively develop a more vibrant and diversified financial market in terms of type of investment products, risk management tool, appropriate corporate financing arrangement, treasury management needs, etc.”
Hong Kong Financial Secretary Paul Chan Mo-po (3rd right) attends the joint television panel discussion program "Budget Forum" at the Central Government Offices in Tamar on Feb 23, 2022. The program was jointly hosted by Cable TV, Phoenix TV, Now TV, Television Broadcasts Limited and RTHK TV. (PHOTO / HKSAR GOVERNMENT)
The proposals will help attract companies and investors to Hong Kong, promoting its leading position in offshore renminbi business, wealth management, and green and sustainable finance, the Securities and Futures Commission said in a response to the budget speech.
Agnes Wong, tax partner in PwC Hong Kong, said that Hong Kong, as an established international financial center, has the edge in developing green finance as it has low tax rates, a simple tax system, a good supply chain, as well as talented professionals.
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Luanne Lim Hui-hung, chief executive of HSBC Hong Kong, said, “We welcome the government’s new measures to strengthen and expand Hong Kong’s capital markets through the continuous extension of the Connect Scheme, boosting our already strong position in green finance, and creating a local yield curve by issuing government bonds with longer tenors while building on our position as the world’s leading market for offshore RMB.
“These initiatives will enrich our product suite and attract more issuers, institutional and retail investors, thus reinforcing Hong Kong’s position as an international financial center.”
