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Contributing to China's Development as a Financial Powerhouse

The world is currently undergoing a profound transformation in the financial landscape, driven by technological innovation. Emerging technologies such as artificial intelligence and blockchain are not only revolutionising financial tools, but also reshaping the flow of capital and redefining the boundaries of financial services. They are creating new opportunities for financial market development. We are accelerating institutional reforms and product innovation in the financial sector, striving to harness the disruptive power of technology and convert it into a driving force for economic growth.

At this critical juncture, Hong Kong is in a favourable position. With the strong support of the nation and the relentless efforts of both the HKSAR Government and the industry, Hong Kong's status as an international financial center continues to be strengthened. In the recently released Global Financial Centres Index^*, the score gaps between Hong Kong and the top two centres – New York and London – have further narrowed to just 2 and 1 points respectively. Hong Kong maintains its position as the third in the world and the first in the Asia-Pacific region. Hong Kong ranks first in the world in several sub-categories, including "fintech offerings", "business environment", "infrastructure" and "reputational and general". These achievements demonstrate that, with the Central Government's strong support and the concerted efforts of the HKSAR government and the industry, Hong Kong's financial strength continues to grow and gain international recognition.

In fact, Hong Kong's financial markets have been performing strongly since the beginning of this year. For example, the total amount of funds raised through initial public offerings (IPOs) has reached nearly HK$150 billion – ranking first in the world – with a notable increase in participation from international long-term funds. Market sentiment has been buoyant, with the Hang Seng Index rising more than 30% year-to-date. Trading activities in the stock market have reached record highs, with the average daily turnover (ADT) exceeding HK$250 billion. In the first eight months of this year, the amount of refinancing of listed companies was close to three times that of IPOs, reflecting the depth and vibrancy of Hong Kong's financial market.

It is worth highlighting that the surge in IPO activity, strong capital inflows and heightened trading volumes have also supported the performance of A-shares, reflecting a healthy synergy between the capital markets of Hong Kong and the Mainland. According to data from the Hong Kong Exchanges and Clearing Limited (HKEX), since September last year, following the listing of 14 H-share companies in Hong Kong, the ADT of their corresponding A-shares on the Mainland has increased by 28% overall, while their A-share prices have risen by 15% on average. An increasing number of high-quality Mainland enterprises are choosing to list in Hong Kong as part of their international expansion strategies. These listings not only accelerate their global business development, enhance revenue generation and boost international visibility, but also foster mutual growth of the financial markets in Hong Kong and the Mainland.

These encouraging market developments have reaffirmed the unique role of Hong Kong's financial system as a vital bridge between capital from the Chinese Mainland and the world. Amid profound shifts in the global political and economic landscape, it is crucial that we seize the current momentum and, through more forward-looking reforms and initiatives, convert these positive trends into sustained drivers of higher-quality and more diversified development of Hong Kong's financial sector. This is not only essential to strengthening and elevating Hong Kong's position as an international financial centre, but also a key path to unlocking growth potential and contributing to the nation's vision of becoming a financial powerhouse.

To sustain this lasting momentum, Hong Kong must find its accurate position within the broader context of national development. Currently, the combined market capitalisation of the stock exchanges in Hong Kong, Shanghai and Shenzhen is roughly equivalent to China's gross domestic product (GDP). Meanwhile, the total market capitalisation of the two major US stock exchanges is more than twice the size of the US' GDP. This comparison highlights the substantial growth potential of China's capital markets and their capacity to serve the real economy more extensively and effectively. It also underscores the important mission that Hong Kong shoulders, as well as the vast potential it holds.

To this end, we are driving the development of all segments of the financial market with a clear and strategic macro perspective. At the heart of our approach is a dual-track strategy: strengthening our traditional advantages while pursuing diversification and expansion. As we continue to enhance established segments, such as the stock market, asset and wealth management and green finance, we are also fully committed to developing emerging sectors – including fixed income and currency (FIC) markets, commodity trading and digital assets – into powerful new engines of growth. Through these efforts, we aim to build a more resilient, diversified and comprehensive financial ecosystem.

This is a long-term endeavour that requires unwavering perseverance. And we are making steady progress. Take the FIC markets as an example: they are not only vital tools for financing and investment, but also play a crucial role in helping investors manage risk, enabling them to operate with greater confidence and ambition. The demand for such instruments is particularly strong in Asia, where international bond issuance has grown at an average annual rate of 16% over the past 15 years – far outpacing the global average of about 4%. Against this backdrop, Hong Kong has firmly established itself as Asia's leading hub for international bond issuance, accounting for nearly 30% of the region's total. Notably, green and sustainable bonds issued through Hong Kong represent about 45% of the regional total—clear evidence of the tangible results delivered by our forward-looking strategies and sustained efforts.

To further develop the FIC markets, under the coordination of the HKSAR Government, the relevant financial regulators have jointly formulated the Roadmap for the Development of Fixed Income and Currency Markets, which was released last week by the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA). The Roadmap comprises 10 initiatives centred around four key pillars – primary market issuance, secondary market liquidity, offshore RMB business and next-generation infrastructure – all aimed at establishing Hong Kong as a major global hub for FIC products.

The development of the FIC markets is fully aligned with our long-standing strategy to reinforce Hong Kong's role as a leading offshore RMB business hub. In 2024, RMB-denominated "dim sum bond" issuance in Hong Kong exceeded RMB 1 trillion, doubling the amount in 2021. The issuer base has become increasingly diverse, reflecting a growing global demand for diversified asset allocation, particularly in RMB-denominated products. We will continue to enhance cross-boundary connectivity, deepen RMB liquidity and broaden the range of available products. We will expedite the launch of offshore RMB treasury bond futures and other risk management tools; secure support from Mainland authorities to expand RMB liquidity facilities. We have also rolled out cross-boundary bond repurchase (repo) business. Together, these efforts aim to foster a more robust and efficient market environment for international investors to hold RMB assets over the long term, while also broadening the practical use cases for offshore RMB.

At the same time, we are actively upgrading Hong Kong's financial infrastructure. The CMU OmniClear, under the HKMA, is working with the HKEX to explore the development of a single platform that enables investors to centrally manage and cross-collateralise a range of assets –including stocks, bonds, etc. – including assets under the "Connect Schemes". We are also strengthening connectivity with international markets, including Switzerland, the United Arab Emirates and other jurisdictions, while actively promoting the recognition of Chinese Government Bonds as collateral by more clearing houses. Meanwhile, the SFC is assessing the feasibility of an electronic bond trading platform to be built and operated by the market. It is also spearheading the development of a commercial repo market and the introduction of a central counterparty clearing mechanism in Hong Kong. These initiatives are aimed at enhancing market liquidity and operational efficiency.

The implementation of these measures will help build a more effective offshore RMB yield curve, providing issuers with more accurate pricing benchmarks and better meeting the asset allocation needs of global investors. These efforts will elevate Hong Kong's offshore RMB ecosystem to a new level.

As we celebrate the National Day on 1 October, we are reminded that amid a complex and ever-evolving international landscape, our country's strategic resolve and developmental resilience remain the strongest pillars supporting Hong Kong's prosperity, stability and accelerated progress. With its steadfast commitment to high-quality development, and its growing leadership in global governance, international trade, and the green transition, our country has demonstrated its responsibility as a major country. It is also actively promoting a more inclusive and universally beneficial model of economic globalisation. All these efforts have created new and diverse development opportunities for Hong Kong. We will continue to harness the unique strengths of the "one country, two systems" framework and fully leverage our own advantages—placing the development of the international financial centre at the core of our efforts to serve the country's needs. As a "super connector" and "super value-adder", Hong Kong will make greater contributions to the country's prosperity and the great rejuvenation of the Chinese nation.

*Note: The report was jointly compiled by the Z/Yen Group from the United Kingdom and the China Development Institute from Shenzhen.

September 28, 2025