China’s financial market reform opens up opportunities for Hong Kong, strengthens gateway role
- Hong Kong’s unique location, regulatory framework and openness make it irreplaceable for foreign investors looking to tap the Chinese onshore market, analysts say
China’s ongoing financial liberalisation will continue to benefit Hong Kong as its status as a gateway to the mainland will be hard to replace, say analysts.
The demand for access to China’s equities and fixed-income markets is rapidly increasing among foreign investors, and they now understand both the opportunities and risks brought by a wider opening up of the market, said Damien Horth, head of Asia-Pacific research at UBS.
China announced on September 10 that it would remove the quota limits on two cross-border investment schemes – Qualified Foreign Financial Institutional Investor and Renminbi Qualified Foreign Financial Institutional Investor – marking the latest step in its reforms.
“Hong Kong is well placed [to benefit from the liberalisation in China], given the experience, given the regulatory framework,” he said, noting that foreigner firms feel comfortable using Hong Kong as a gateway to trade China’s onshore market.
Horth’s views echo those of the city’s leaders and regulators who see rising interest among foreign investors to tap the mainland’s markets, but are comfortable parking their money in Hong Kong.
