Opinion | Striving to become financing center for Mainland capital markets

By Dr. Kevin Lau

Recently, I came across an online article by Nicolas Aguzin, the CEO of Hong Kong Exchanges and Clearing Limited (HKEX), stating that China has achieved international leadership in various innovative fields. Breakthroughs have been made in technologies and products related to mobile phone chips, and significant progress has been achieved in AI technologies such as language recognition and processing, demonstrating the accelerating development of Chinese technology. Aguzin predicts that these advancements will contribute to China's economic growth in 2023, estimating that China will account for approximately one-third of global growth for the year. Additionally, he estimates that the size of the mainland capital market will increase from $30 trillion to $100 trillion over the next 10 years.

The current economic environment is challenging, and both the government and financial experts approach future economic development with cautious optimism. Although the pandemic is no longer making headlines, tensions between China and the United States persist, geopolitical situations remain tense, the conflict between Russia and Ukraine shows no signs of resolution, and violence has erupted in Israel. Global inflation has reached a point of concern, and major banks in the United States have faced closures. In such circumstances, with the significant expansion of the mainland capital market right next to us, it naturally raises the question of how Hong Kong can benefit from it.

Hong Kong is one of the world's three major financial centers, and the answer should lie there. In my opinion, Hong Kong should strengthen its connection with the mainland and strive to become the financing center for mainland capital markets. In recent years, the Securities and Futures Commission and HKEX have continuously adjusted and optimized listing rules to facilitate more mainland companies to list in Hong Kong, encouraging Chinese concept stocks and biotechnology stocks to come to the city. I agree with Aguzin's prediction on the future development of the mainland capital market, believing that if Hong Kong can provide financing channels for the thriving new economy in the mainland, it will undoubtedly activate the local financial market and ultimately benefit from it.

Business is a world of "survival of the fittest" and one must be flexible and adaptable to thrive. Therefore, Hong Kong's financial regulatory mechanism must be highly sensitive and capable of making adjustments in response to external environments. In the current context, it should promptly align with the mainland's economic development and provide corresponding financial assistance, creating the most favorable financing and development environment for the flourishing mainland technology companies.

The author is a specialist in radiology with a Master of Public Health from the University of Hong Kong, and an adviser of Our Hong Kong Foundation.

The views do not necessarily reflect those of DotDotNews.