Hong Kong’s leader wants more financial integration with China

Hong Kong’s leader said she told Chinese officials the city should be transformed into a global hub for private wealth and a more prominent offshore Renminbi center, even amid concerns about the former British colony’s future as a financial center.

Chief Executive Carrie Lam outlined some details of a proposal she made to Chinese leaders as she addressed a weekly news conference Tuesday, adding that Beijing’s plans to build a new free-trade zone on China’s southern island province of Hainan were not a threat to Hong Kong’s position. She said Hong Kong should be “promoting greater connectivity” between its financial markets and mainland China’s.

“Over the years we’ve had the Shanghai-Hong Kong stock connect, Shenzhen-Hong Kong stock connect and the bond connect,” she said. “There are other connectivities that we’ve been talking about, whether we could have an insurance connect, an IPO connect or private wealth connect.”

“I could not disclose the exact details of my latest proposal to the central government, but these proposals would revolve around this plan to make Hong Kong more international, to turn Hong Kong into a more prominent offshore Renminbi center, to transform Hong Kong into the hub for the management of private wealth,” Lam said.

Lam was speaking on June 9, the anniversary of the first major march last year against Hong Kong’s extradition bill, which organizers said drew close to one million people. Throughout the unrest, protesters have often marked even months-old anniversaries with fresh demonstrations.

Her comments came as the U.S. and other foreign governments mull retaliatory measures over Beijing’s plan to bypass the semi-autonomous city’s legislature and impose sweeping new national security legislation barring subversion, secession and sedition in Hong Kong..

Lam’s proposal was first revealed by Hong Kong and Macau Affairs Office Deputy Director Zhang Xiaoming in a keynote speech made at a forum Monday. Beijing officials including Vice Premier Han Zheng provided “positive feedback” toward the proposal, Zhang said.

Zhang also said China would “definitely strengthen” and “spare no effort” in supporting and reinforcing Hong Kong’s status as an international finance center after the national security legislation was implemented.

Renewed Tensions

Lam is facing renewed political tensions over the controversial security legislation, with protests that rocked the city last year returning after a coronavirus-induced halt.

The new measures have prompted international governments and the local American Chamber of Commerce to voice concerns about the possible erosion of the city’s autonomy from Beijing and whether the territory could maintain key freedoms—including of press and assembly—that make it distinct from the mainland.

In the wake of the move, the U.S. said it could no longer certify Hong Kong as sufficiently autonomous from China, an annual ruling that underpins its status as an international business center and allows different treatment from the mainland on tariffs and export controls.

Lam, who was appointed by a committee stacked with Beijing loyalists, has taken China’s side on the security legislation. on Tuesday she reiterated her call for Hong Kongers to support the measures, despite a majority of residents saying they opposed the bill in a recent survey.

Although she said the legislation was being drafted in Beijing and that she was not aware of the final details, she has nevertheless urged people to rally behind the bill—and has called the criticism of it unwarranted.

Even as the world was still digesting Beijing’s surprise move to impose the new measures, Chinese leaders announced plans to build up a rival trading hub on Hainan, which is known more for its beaches and tourism than as a center for financial services. It lies just southwest of the so-called Greater Bay Area that includes Hong Kong, the semi-autonomous territory of Macau and the mainland city of Guangzhou.

“I see a lot of synergy and potential collaboration between the Hainan free port and the Guangdong-Hong Kong-Macau Greater Bay Area,” Lam said at her briefing. “I don’t see that sort of direct competition. We should seize every opportunity of the deepening of reform and opening up of the mainland economy, whether it’s the central level or at the provincial level, as opportunities for Hong Kong.”