News about China, Hong Kong, PBOC, and Other Details

News about China, Hong Kong, PBOC, and Other Details

Beijing expands its existing financial schemes. Moreover, it is voicing continued support for Hong Kong’s role as a gateway for international investors into China. It is during concerns about the new national security law’s impact on the city.

On Friday, China’s central bank celebrated the third anniversary of Bond Connect. It is a scheme that allows foreign investors to buy bonds in the interbank market of onshore through a financial institution of Hong Kong.

The PBOC (People’s Bank of China) vowed to improve the program. It has helped to boost foreign ownership of Chinese bonds. At the end of June, overseas investors held about nine percent of China’s government bonds.

Last week, China also launched wealth management connect program. Thus, the program can allow foreign wealth managers to offer products through Hong Kong to clients in the Greater Bay Area. It includes China’s tech hub of Shenzhen and eight other cities in the Pearl River Delta.

Details of the program are drafted. Nevertheless, it might help cement the city’s role as a gateway to China.

In recent weeks, strong verbal support from Chinese leaders accompanied those efforts. Vice-Premier Liu He is a top economic aide to President Xi Jinping. Thus, Liu He said last month that China would continue supporting Hong Kong as an international financial center. Last month, the People’s Bank of China made similar statements. It was because Western nations expressed concern over the security law. It has been criticized as heavy-handed and an assault on the freedom of the city.

China

A total of 27 countries, including Japan, Germany, Britain, New Zealand, and Australia, have issued a joint statement. Thus, the report urges China to reconsider its national security law. Meanwhile, the United States Congress passed legislation that will allow Washington to sanction banks. They will sanction banks that do business with Chinese officials involved in implementing the law.

Tommy Wu is an economist for Oxford Economics. On Tuesday, he said that the key economic issues are whether the city will retain its role as a gateway out and in China, and it’s status as a global financial hub.

Moreover, Wu said that Hong Kong might broadly maintain its current role. Nevertheless, it will not be as prominent as it was before. It is because of the efforts of Beijing to preserve the city as a financial gateway.

In recent years, Hong Kong’s role in the overall Chinese trade has declined. Nevertheless, the importance of the city for financing in China has increased, especially its access to global capital. It is because the government maintains rigid controls over financial flows of cross-border.

Pan Gongsheng works at Foreign Exchange. He is head of the State Administration. He said that las month, the Stock Connect scheme linking two mainland and Hong Kong stock exchanges in Shenzhen and Shanghai had played an essential role in China’s financial opening up.

The Stock Connect scheme allows via Hong Kong intermediaries, to buy stocks on mainland exchanges. Pen Said that they now accounted for sixty percent of foreign purchases of mainland stocks.

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