Editor's note: The 2025 Lujiazui Forum was held last week, covering key economic topics such as financial opening and stablecoins.
【Anchor】Hello everyone, welcome to DDN Business Insider. I am Yunfei Zhang.The 2025 Lujiazui Forum was held last week. This two-day event covered current economic hot topics such as financial openness and stablecoins, while the signing of the "Action Plan for Collaborative Development of International Financial Centers" became a hot topic in the Hong Kong market. In this episode, we invited renowned economists Song Qinghui, Yang Delong, Chief Economist of First Seafront Fund, and Yu Jianing, Honorary Chairman of the Hong Kong Blockchain Association and President of Uweb, to provide analysis and insights on the hot issues. Hello everyone!
First, let's focus on the part related to Hong Kong. On the first day of the forum, Shanghai and Hong Kong jointly signed the "Action Plan for Collaborative Development of International Financial Centers," which focuses on advancing infrastructure connectivity between Shanghai and Hong Kong, as well as the strategic complementarity of offshore finance between the two cities. It encompasses six areas and 38 measures. Mr. Song, what do you think the significance of this "Action Plan" is for the collaborative development of Shanghai and Hong Kong?
【Song】The collaborative development of the Shanghai-Hong Kong International Financial Centers holds tremendous opportunities. The Action Plan for Collaborative Development of the Shanghai-Hong Kong International Financial Centers represents a strategic upgrade of financial cooperation, moving from past point-to-point, one-way breakthroughs—such as the Shanghai-Hong Kong Stock Connect and Bond Connect—to a systematic top-level design. It no longer focuses merely on channel construction but is committed to creating a complementary and mutually prosperous financial ecosystem. This is a programmatic plan for the future collaborative development paths of the two major international financial centers under the national strategy of becoming a financial powerhouse. I believe the issuance of this plan marks a new and deeper phase of integration in Shanghai-Hong Kong cooperation. Among the 38 measures, I think the connectivity of financial infrastructure is particularly noteworthy. For example, the interconnection between the Faster Payment System(FPS) and the China's Internet Banking Payment System (IBPS) best illustrates the future breakthroughs in Shanghai-Hong Kong cooperation in many areas. As we all know, previous initiatives like the Shanghai-Hong Kong Stock Connect and Bond Connect addressed the arterial capital connectivity issues for institutional investors. However, the interconnection of Hong Kong's Faster Payment System(FPS) with the mainland's online cross-bank clearing system aims to connect the "capillaries" (referring to retail payment networks) serving individuals and small and medium-sized enterprises. This interconnection has profound significance. It may signify that the scope of Shanghai-Hong Kong financial cooperation has extended from capital market investment transactions to a wider range of economic activities, such as cross-border e-commerce, daily consumption, and tourism.
【Anchor】Thank you. Based on this "Action Plan," how do you anticipate the collaborative cooperation between the Shanghai and Hong Kong International Financial Centers will unfold in terms of differentiated development and mutual empowerment?
【Song】The collaborative development and mutual empowerment of the Shanghai-Hong Kong International Financial Centers may unfold in the following three aspects:
First, a mainland company can list on Shanghai's STAR Market to gain support from international capital. When it needs to go global, it can then proceed to list a second time in Hong Kong, thereby raising funds from around the world and managing its global operations from there.
Second, in terms of collaborative product innovation, I believe that financial institutions in Shanghai should focus on developing assets closely related to the mainland's real economy, such as Sci-Tech innovation bonds and data center REITs. Financial institutions in Hong Kong can then package these into derivatives and ETFs for global investors and provide tools for hedging exchange rate risks.
Third, in emerging fields like green finance, fintech, and stablecoins, Hong Kong can take the lead in aligning with international standards, while Shanghai can leverage its strong market size for application and promotion. Together, they can enhance China's voice in global financial standards.
【Anchor】Thank you. Mr. Yang, what is your view on this "Action Plan," and what do you think the future prospects for collaborative development between Shanghai and Hong Kong will be?
【Yang】Based on the action plan, the collaborative development and mutual empowerment of the Shanghai-Hong Kong International Financial Centers will gradually unfold. The connectivity between financial institutions in both regions will bring greater convenience for investors from both sides. This will jointly enhance China's voice and influence in the global financial system, further solidifying the positions of the Shanghai and Hong Kong international financial centers.
【Anchor】Yes, additionally, at this year's Lujiazui Forum, the ongoing hot topic of stablecoins was mentioned repeatedly. Central Bank Governor Pan Gongsheng first discussed the role of stablecoins in cross-border payment systems. He believes that emerging technologies such as blockchain and distributed ledgers are driving the robust development of central bank digital currencies and stablecoins, achieving "payment as settlement" and fundamentally reshaping traditional payment systems. However, he also pointed out that this poses significant challenges to financial regulation. Mr.Yu, what do you think this implies?
【Yu】I believe this is very important. Governor Pan discusses stablecoins alongside central bank digital currencies, acknowledging that they are leveraging emerging technologies to change the underlying logic of traditional payment systems and achieve "payment as settlement." This indicates that stablecoins and the technologies and market demand behind them have become a significant and inescapable part of the global financial system. By treating it as a serious financial phenomenon, Governor Pan's remarks suggest that stablecoins will gradually come into the regulatory spotlight.
I believe that in the future, stablecoins will undergo a series of developments in China. The context of this statement is the emerging changes and increasingly fierce competition in the global cross-border payment landscape. Indeed, traditional cross-border payment systems are relatively inefficient, costly, and carry risks of being weaponized. The reality is that USD-pegged stablecoins have already formed a substantial global clearing and settlement network that could potentially replace traditional banking systems. Although the stablecoin system currently exists in a relatively gray zone, its efficiency and low costs make it highly attractive for certain customer groups in cross-border payments.
Furthermore, China's digital yuan (e-CNY) will also need to clarify its differentiated development from stablecoins to go international, as there will be competitive dynamics involved. Engaging in research and identifying these challenges now is also a way to think ahead about compliance and regulatory exploration.
【Anchor】OK. We know that Hong Kong's stablecoin policy is about to be implemented. Do you think this means that the stablecoin sector will become a key breakthrough for Hong Kong's financial development, especially in achieving differentiated development with mainland cities like Shanghai?
【Yu】The implementation of stablecoins in Hong Kong will play a crucial role in upgrading the entire financial system and further developing the Hong Kong economy. From my perspective, the development of stablecoins and the tokenization of real-world assets in Hong Kong will be key to this new wave of financial innovation. I consider this to be the fourth phase of financial innovation in Hong Kong, comparable to previous initiatives like H-shares, VIE structures, and the Shanghai/Shenzhen-Hong Kong Stock Connect programs.
Stablecoins and other digital currencies play a unique role globally, especially in cross-border payment settlements. As a free port, Hong Kong serves as a crucial center for cross-border payment settlements for China. Therefore, Hong Kong must embrace stablecoins and the new generation of digital financial infrastructure to maintain and strengthen its position as an international financial center.
Moreover, Hong Kong's proactive regulation indicates its intention to establish rules that could even be exported through initiatives like the Belt and Road. This could significantly enhance Hong Kong's international financial competitiveness. The stablecoin legislation is a major attempt for Hong Kong on the global financial map. Hong Kong is clearly shifting from being a follower in this field to becoming a creator of global stablecoin rules and a standard exporter. This represents a subtle competition in rules and regulations.
Hong Kong indeed has the capability to establish a regulatory framework that aligns with international standards while incorporating its own characteristics, based on its independent customs area and English common law system. This regulatory standard can also radiate outward. By leveraging the unique advantages of "one country, two systems," Hong Kong can even achieve differentiated competition with the United States, vying for a voice in digital finance and enhancing national financial security.
Furthermore, Hong Kong's stablecoins are not limited to HKD stablecoins; they may become a key hub for global stablecoin settlements. The acceleration of stablecoin legislation reflects Hong Kong's differentiated development compared to other international financial centers like Shanghai.
Hong Kong's path aims to enhance the robustness of international clearing and settlement systems to serve national financial security, ensuring efficient and secure cross-border trade and settlements under any circumstances. This initiative not only adds stability to Hong Kong but also provides a crucial backup system for national financial security.
Thus, through the development of stablecoins and other measures, Hong Kong is constructing a new, robust, transparent, efficient, and intelligent digital financial system that aligns with international standards. If successfully implemented, this initiative could attract more capital into Hong Kong, increase investment in high-quality assets, and propel the further opening up of international investments and financing in Hong Kong into a new phase.
【Anchor】Another issue worth noting is the multiple measures announced by CSRC Chairman Wu Qing at the Lujiazui Forum, including the establishment of a "Sci-Tech Innovation Growth Board" on the STAR Market and the reintroduction of listing standards applicable to unprofitable companies.
Wang Han, told DDN reporters that these reform measures reflect the capital market's further fulfillment of the financial needs of technology companies throughout their lifecycle, especially for early-stage, unprofitable yet high-potential tech firms. This series of policies also continues and deepens last year's "Eight Guidelines for the STAR Market."
Wang pointed out that both China's technology and capital markets are currently at a significant strategic opportunity. Wu Qing's speech at the Lujiazui Forum clarified the direction and path for deepening capital market reforms, which will further strengthen support for technological innovation and promote a virtuous economic cycle among technology, capital, and industry. This not only helps China secure a favorable position in global technological competition but also provides strong momentum for high-quality economic development. Additionally, the structure and efficiency of the capital market will be further optimized, creating a better investment environment for investors.
For some time, the Hong Kong IPO market and "A+H" listings have been thriving, while the Shenzhen Stock Exchange is also set to welcome "H+A" listed companies.
With multiple favorable factors in play, Mr. Yang, how do you view the future performance of the A-share and Hong Kong capital markets, and what investment opportunities do you anticipate will be worth attention?
【Yang】The gradual implementation of new measures for the STAR Market reform is beneficial for the long-term healthy development of both the A-share and Hong Kong capital markets. Currently, both A-shares and Hong Kong stocks are generally in a valuation trough, while U.S. stocks are at high valuations. Some international capital is flowing out of U.S. stocks and seeking new investment opportunities.
I anticipate that in the second half of this year and in the coming years, the capital markets in the mainland and Hong Kong will enter a structural bull run, with market focus expected to continuously rise. Tech stocks, internet stocks, and dividend-paying stocks that represent the direction of economic transformation will all present good investment opportunities. I recommend that investors actively seize these opportunities, maintaining investment discipline to capture the prospects of China's capital markets in the coming years.
【Anchor】OK, thank you. That's all for this episode. Remember to follow us on YouTube or download our APP. I'm Yunfei Zhang, thanks for watching, and see you next time.
Anchor: Laura Cheung | Edited: Kelly Yang, Laura Cheung, Rachel Liu | Translate: Kato Ip | Proofread: Chris Liu
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