In the recent Policy Address, a series of measures were announced to further strengthen Hong Kong’s role as an international financial center and reinforce its status as the largest offshore renminbi business hub. The measures are novel but practical.

Financial institutions put forward a number of suggestions on how to improve the market mechanisms and expand the business scopes for RMB businesses in Hong Kong during the public consultation period. The Policy Address addressed them accordingly. In addition, based on the analysis of global economic trends and the Chinese mainland’s policies and measures on accelerating the opening-up of the financial industry, the Policy Address is forward-looking and of significance for the next phase of development of Hong Kong as one of the world’s premier international financial centers.

Hong Kong plays a pivotal position in the high-quality development and high-level opening-up of the mainland. The central government has called on Hong Kong to draw on its strengths as an international financial center to raise capital and help the country become a financial powerhouse. The better integration of Hong Kong into the overall national development will provide a new impetus to the growth of its financial development, and also help support the national development strategies, including the Belt and Road Initiative (BRI), the Guangdong-Hong Kong-Macao Greater Bay Area, and cooperation under the Regional Comprehensive Economic Partnership (RCEP), by leveraging the city’s unique position and advantages.

The Hong Kong Special Administrative Region government has responded to this call promptly. The Policy Address proposed a raft of measures, including improving interconnection mechanisms, enriching RMB-denominated products, enhancing international asset and wealth management, optimizing the securities market, facilitating cross-border finance, establishing an international gold trading market, and reinforcing green finance.

These measures will help enhance the city’s role as a global offshore RMB business hub and an international financial center.

Hong Kong’s economy has been experiencing steady growth in the wake of the COVID-19 pandemic. As a pillar industry, Hong Kong’s financial sector performs well and has been supporting the development of other industries. Regional cooperation also provides enormous opportunities to the city.

The Policy Address provides an in-depth analysis of the crucial role Hong Kong plays in the changing global and regional economic landscapes, with the wider usage of RMB in mind. Hong Kong should further expand its global economic and trade network, particularly with BRI-participating countries, and strive to join the RCEP as soon as possible, facilitate more Chinese mainland companies to “go global” by leveraging Hong Kong’s platform, and provide greater convenience for cross-border RMB settlement and financing.

The key to success lies in effective implementation. With the support from the central government, the collaborative efforts from the HKSAR government and the financial sector, there is no doubt that the policy goals outlined in the Policy Address will be achieved successfully

Collaboration with BRI-participating countries will foster strategic investments in the region and on the mainland, attracting long-term capital and reinforcing Hong Kong’s position as a financial gateway for regional development. The initiatives to attract overseas funds and streamline the listing procedures of enterprises will help increase market liquidity, encourage international investor participation, and strengthen Hong Kong’s standing as a global capital-raising hub.

Another highlight of the Policy Address is the establishment of an international gold-trading market, which has garnered significant interest from the industry. In recent years, demand for gold has surged rapidly in China, India, Southeast Asia and the Middle East; these countries and regions have become new global gold consumption centers. Hong Kong should leverage its advantages and collaborate with the Shanghai Gold Exchange to promote diversification of its financial market.

The Policy Address also proposed optimizing market infrastructure of the capital market in Hong Kong. It called for upgrading of the Central Moneymarkets Unit and the development of a fixed-income market infrastructure by setting up a central clearing system, making Hong Kong a more attractive market for high-quality RMB bond issuances, which in turn can be used as collateral for RMB bond repo transactions.

In addition, the expansion of the night-time and cross-border service capabilities of Hong Kong’s RMB real-time gross settlement system will help foster the linkage of fast payment systems between the mainland and Hong Kong, further consolidating Hong Kong’s leading position in global RMB clearing and payments.

As pointed out in the Policy Address, Hong Kong should encourage more listed companies to have shares listed on the RMB stock trading counter, and issue more RMB bonds. It should also launch offshore RMB sovereign bond future products, and expand the scope of the current Bond Connect Scheme. These are worthy of further research and follow-up by the industry.

The key to success lies in effective implementation. With the support from the central government, the collaborative efforts from the HKSAR government and the financial sector, there is no doubt that the policy goals outlined in the Policy Address will be achieved successfully.

The author is deputy chief executive of the Bank of China (Hong Kong).

The views do not necessarily reflect those of China Daily.