Visit to Incheon: Connecting Belt and Road countries and fulfilling global responsibility
I recently visited Incheon of Korea to attend the Asian Development Bank (ADB) Annual Meeting on the theme of “Rebounding Asia: Recover, Reconnect and Reform”. Apart from discussing with global participants about the post-pandemic economic recovery in Asia, I also seized the chance to promote Hong Kong’s unique advantages in financial services.
Fostering
green transformation and green economic development has been a key strategy of
the ADB in recent years. In striving to
become the “Climate Bank” of Asia, the ADB has set a target of providing developing
member countries with green financing of US$100 billion in total between 2019
and 2030. In 2022 alone, the ADB
provided green financing of US$6.7 billion to support green mitigation and transformation
projects in various Asian regions. An example
of such is a project which involves the pioneering use of an innovative and
scalable energy transition mechanism to achieve early retirement of a coal-fired
power plant.
In view of the great demand for green
financing in Asia, the ADB has also been carrying out internal reforms in
recent years, including reviewing its organisational structure and capital
framework to better meet the financing needs of developing member
countries. A major priority of the
reforms is to promote projects with private capital participation, through
which the ADB intends to enhance the efficiency of the use of balance sheets
and strengthen the overall financing capability. In particular, the ADB has signed an
agreement for up to US$1 billion with five insurers to support private financial
capital participation in ADB’s lending projects.
As
an international financial centre, Hong Kong has been playing an active role in
the investment and financing activities of the ADB. In 2022, the ADB issued a total of over
US$720 million of bonds in Hong Kong. Meanwhile,
our quality and efficient professional services have given much support to a
number of ADB-financed projects, with local companies and consultancies securing
a cumulative total of over US$1.4 billion worth of contracts offered by the ADB
in its procurement exercises over the years.
During my visit to Incheon, I specifically introduced to the ADB and its
members the opportunities to issue insurance-linked securities (ILS) in Hong
Kong. The establishment of a dedicated
regulatory framework in this regard earlier and the launching of the Pilot Insurance-linked
Securities Grant Scheme in 2021 have facilitated four ILS issuances so far, involving
a total issuance amount of US$560 million.
These securities, issued in the form of a catastrophe bond, serve to
cover losses inflicted by typhoons and earthquakes in the Mainland and overseas
places. Hence, this type of debt
instrument is particularly important to island countries which are prone to
extreme weather conditions, and we welcome the ADB to make use of our platform
to issue ILS, a move also closely in line with its target of empowering private
capital.
The
ADB Annual Meeting has brought together various government representatives in
charge of financial and taxation matters from around the world. As this year
marks the 10th anniversary of the "Belt and Road Initiative”, I also took
the chance to discuss its practical achievements and the future development
opportunities with the participants of the Annual Meeting. I met Mr. Ibrahim Ameer, Finance Minister of the
Maldives, to discuss the comprehensive avoidance of double taxation agreement between
Hong Kong and Maldives which has entered the final preparation stage, and we
hope to sign the agreement in the near future for its formal implementation.
The
ADB team, representatives of constituents, the Korean government, financial
regulators and the financial sector have all shown keen interest in the mutual
access schemes for the capital markets between Hong Kong and the Mainland as
well as the development of financial technology and green finance in our market. I have invited them to join a host of upcoming
signature events in Hong Kong, including the Hong Kong Fintech Week in November
and the Asian Financial Forum in January next year. I certainly hope they can come and see for
themselves the various business opportunities offered in Hong Kong and the Guangdong-Hong
Kong-Macao Greater Bay Area.
The Government has also recently announced
its proposal to improve district governance, and the day after I returned to
Hong Kong from Korea, I expressed my support for the proposal at the street
booth of "Hong Kong Alliance for Improving District Governance". The proposal fundamentally improves the district
governance structure and is guided by three principles, namely, putting
national security as the topmost priority, fully implementing the principle of
“patriots administering Hong Kong” and manifesting the executive-led
government. The proposal will strengthen
the coordination, and enhance the capacity and effectiveness of district
governance, returning the District Councils to their position as district
organisations which are not organs of political power under the Basic Law for
the benefits of the public. I call on
all members of the public to render support to the proposed package for
improving district governance.
8 May 2023