Hong Kong's capital market has been developing rapidly for the past 25 years. Many Chinese mainland companies are listed on the offshore market of Hong Kong, which plays a huge role in corporate management, corporate governance, and fundraising. The IPO, namely the listing function, is particularly well developed in Hong Kong, making it a global leader as well. The average fundraising amount over the past decade has exceeded that of all exchanges in the U.S., as well as the two exchanges in Shanghai and Shenzhen.
The Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and Bond Connect link the offshore market of Hong Kong to the onshore market of the Chinese mainland in a special way. In addition to the stock market, another important function of Hong Kong is direct investment. 60% of the foreign direct investment in the Chinese mainland comes in through Hong Kong. As an offshore international financial center of China, Hong Kong is very important for the future interface between China's external and internal circulations.
Prof. Xiao Geng believes that, Hong Kong has a lot of potential for future development. The Hong Kong dollar system is very special in the world and is an independent regulatory system, which means that Hong Kong dollar-denominated stocks, bonds and bank loans can be independently regulated, and this system plays an important role in the development of China's external circulation. For China, the current geopolitical environment is particularly important. "Therefore, Hong Kong's financial system will play a more important role for China to deal with future geopolitical risks, especially to safeguard China's overseas assets. The Hong Kong dollar-based bond market has huge potential in the future and will play a very important role, especially in the process of integration in the Greater Bay Area."
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