Currency affair:
Chief Executive Donald Tsang says liberalising the renminbi could provide stability and opportunity to the global financial system.
Overseas meeting:
Chief Executive Donald Tsang (left) meets with President Hu Jintao ahead of the APEC CEO summit.
Renminbi liberalisation offers stability
November 12, 2011
Hong Kong looks forward to playing a full and pivotal role in the gradual liberalisation of the renminbi, Chief Executive Donald Tsang said in an address at the Asia-Pacific Economic Co-operation 2011 CEO Summit in Honolulu today.
Not only will liberalising the Mainland currency firm up Hong Kong's financial-services sector in times of global uncertainty, Mr Tsang said, “It will - I believe - provide stability and opportunity to the global financial system."
As a small externally-orientated economy and international financial centre, Hong Kong's best protection against the current instability was to keep its own house in order.
"We must also remain vigilant to the highly volatile market conditions worldwide. The best way to achieve this is to build on our strengths and shore up our more vulnerable areas," Mr Tsang said.
To enhance supervision of credit-rating agencies, for example, Hong Kong had amended laws to introduce a new regulatory regime under which both corporate credit-rating agencies and their individual rating analysts must be licensed by Hong Kong’s Securities & Futures Commission and are subject to a code of conduct.
"In regard to short selling, we already have a robust regulatory regime, including banning naked short-selling and the uptick rule. We are working on a new short position reporting regime to be implemented next year. This will assist regulators in monitoring the overall market situation and help maintain market stability.
"On banking, we have submitted to our legislature the necessary legislative amendments required to implement the latest Basel Accords in a timely manner," said Mr Tsang.
Development opportunities
Emphasising the importance of seeking out new development opportunities, the Chief Executive said one of Hong Kong's most important roles as China's global financial centre was to promote offshore business using renminbi.
Earlier in the morning, the Chief Executive met President Hu Jintao and briefed him on Hong Kong's latest developments.
In the evening, he attended a reception for Hong Kong executives and prominent local interlocutors hosted by the Secretary for Commerce and Economic Development, Mr Gregory So.
Mr Tsang will attend the APEC Economic Leaders Meeting and meet US Secretary of State Hillary Clinton on November 13. He will depart for Hong Kong the following morning.
