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My visit to Hangzhou and Suzhou

The China Securities Regulatory Commission (CSRC) recently announced five measures on the collaboration with Hong Kong's capital markets, including expanding the eligible product scope of exchange-traded funds under Stock Connect; including real estate investment trusts (REITs) under Stock Connect; supporting the inclusion of Renminbi (RMB) stock trading counter under Southbound trading of Stock Connect; and enhancing the arrangements for mutual recognition of funds. These four measures aim at further enriching the contents of mutual access between the capital markets of the Mainland and Hong Kong, and further promoting the concerted development of the capital markets in the two places. CSRC will also support leading enterprises of industries in the Mainland to list in Hong Kong, and will strengthen communication and coordination with the relevant authorities. This measure will benefit Hong Kong's initial public offering market, and having more companies with long-term growth and return potential to list in Hong Kong will further attract international capital flow into Hong Kong, thereby strengthening and enhancing Hong Kong's status as an international financial centre. The measures have fully demonstrated the Central People's Government support to Hong Kong.

Following my visit to Hangzhou and Suzhou last week, I have come to notice that numerous local enterprises have either applied for listing in Hong Kong or are considering doing so. They recognise the institutional advantages of Hong Kong's market and our seamless alignment with international standards. They believe that offshore financing will help expedite their growth in both the Mainland and international markets. These innovative technology (I&T) enterprises, located in the Yangtze River Delta (YRD) region, also eye on synergies between Hong Kong and other cities in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), such as the I&T cooperation platforms with Shenzhen. It is their wish to fully leverage the advantages of the two national development strategies, namely the YRD Economic Zone and the GBA, in order to scale their businesses to new heights through regional collaboration.

Attending and delivering a keynote speech at a seminar titled "Hong Kong Serving as a Multinational Supply Chain Management Centre for Mainland Enterprises", which was co-organised by Invest Hong Kong and the Hong Kong Economic and Trade Office in Shanghai of the Hong Kong Special Administrative Region Government, during the visit to Hangzhou.

During my visit, I had the opportunity to explore a variety of private enterprises operating in fields such as artificial intelligence, Internet of Things, biotechnology, new energy, and new materials. I also had separate meetings with leaders of the two cities. During my interactions with Mainland I&T enterprises, I was impressed was the presence of young entrepreneurs who possessed a global perspective. These enterprises have invested significant resources and manpower into research and development (R&D) and innovation. They seek to achieve technological breakthroughs and enhance the competitiveness of their products and services.

As these enterprises strive to accelerate their own development, they have also broadened their scope from the Mainland market to the international market. They aspire to utilise Hong Kong as their primary springboard and platform for accessing the global market. This includes establishing corporate treasury centres and international business headquarters in Hong Kong.

Visiting an I&T enterprise in Hangzhou.

Visiting an I&T enterprise in Hangzhou to learn about their latest technological R&D achievements and development plans.

Meeting with Mr Liu Jie, Deputy Secretary of the Communist Party of China (CPC) Zhejiang Provincial Committee and Secretary of the CPC Hangzhou Municipal Committee.

For many enterprises, Hong Kong possesses a wide range of strengths. They include the free flow of capital, goods, data and talent; the role of connecting financial markets and services of the Mainland and the world; a fair and open business environment with a simple and low tax regime; extensive international connections; efficient and high-quality professional services; familiarity with international rules and practices; as well as a deep pool of talent from around the world. Furthermore, enterprises that are eager to establish scientific research centres in Hong Kong have highlighted our robust intellectual property protection regime. They believe it will enable the development of a new business model of "patent monetization". Hong Kong, where both Mainland and international data converge, is gradually fostering cross-boundary flow of data with the GBA, providing a solid foundation for scientific research.

Next month, we will witness the establishment of a collaborative I&T platform jointly created by Hong Kong and Hangzhou. The platform will focus on collaboration on technological R&D, transformation and realisation of R&D outcomes, as well as scientific and cultural exchanges, and more. It will also establish an exchange mechanism to facilitate the sharing of premium resources. This would represent a new milestone in I&T collaboration between the two cities. Several technology enterprises based in Hangzhou will also establish their presence in Hong Kong, by setting up R&D centres or expanding their operations overseas.

Another highlight of my visit was to acquaint Hangzhou's enterprises with the advantages Hong Kong can offer in managing their multinational industrial and supply chains, financing their offshore trading activities, thereby facilitating the expansion of their international business. During the exchange session of the thematic seminar, many enterprises expressed their aspiration to proactively explore international business opportunities by extending their reach and better utilising overseas resources in logistics and transportation, marketing and sales, investing in the constructions factories, overseas procurement, and more. This will also help them navigate the challenges posed by geopolitical tensions and unilateralism. In fact, Hong Kong, with its diverse strengths, can generate greater value for Mainland enterprises in their pursuit of international business development. Hong Kong can provide one-stop services, including supply chain management, trade financing, business consultation, as well as talent and corporate training.

Visiting an enterprise primarily engaged in solar photovoltaic and green energy while in Suzhou.

Visiting an enterprise in Suzhou engaged in R&D in hydrogen power to learn about its fuel cell system.

Meeting with Mr Liu Xiaotao, Secretary of the CPC Suzhou Municipal Committee.

In the future, in addition to enhancing our efforts in the Mainland to promote Hong Kong's multifaceted advantages and latest developments, we will also strive to strengthen our ties with the international business community. This week, Hong Kong is proud to host the Second 2024 APEC Business Advisory Council Meeting (ABAC II). It has been nine years since the last time this significant event was held in Hong Kong. ABAC II will gather over 200 business and trade leaders from the Asia-Pacific Region, providing a platform for exchanging views on issues of common interest to the international business community.

We have arranged a rich itinerary for the visiting business and trade leaders. It includes tours to Hong Kong Science Park, M+ Museum, Hong Kong Palace Museum, the Hong Kong International Airport, etc. Through these visits, we aim to showcase Hong Kong's latest achievements in the fields of I&T, cultural and creative industries, and as an aviation hub, and more.

April 21, 2024