China’s vice premier vows to boost Hong Kong competitiveness, says stimulus push has ‘benefited’ the city

Chinese Vice Premier He Lifeng on Tuesday vowed to boost Hong Kong’s competitiveness by investing in the city’s innovation and delivering supportive financial policies.

Speaking at the third Global Financial Leaders Investment Summit, hosted by the Hong Kong Monetary Authority, He reiterated Beijing’s commitment to “explore and implement” measures aimed at building Hong Kong as an “international financial center.” That’s according to CNBC’s translation of his spoken Mandarin.

Beijing’s stimulus measures have already “benefited” Hong Kong, said He, who oversees a key economic and financial policymaking body. “The upward trajectory of the economy is more certain.”

To strengthen its financial industry, Hong Kong needs to leverage measures from mainland China as well as its global connections, Li Yunze, minister of China’s National Financial Regulatory Administration, said in a panel following He’s speech.

Almost 80% of mainland businesses that seek an offshore listing would go to Hong Kong, Li said, stressing the city’s future “has always been intertwined with” China.

During the same panel, Wu Qing, head of China’s securities regulator, said that Hong Kong will continue pursuing policies that attract more foreign investment.

Some of the world’s largest banks have moved to scale back operations and cut jobs in Hong Kong and mainland China amid a prolonged dearth in listing and deal-making activities.

An exodus of capital made the city’s Hang Seng the worst-performing major index last year, marking fourth straight years of decline. And Hong Kong’s stock market saw proceeds from initial public listings (IPOs) and follow-on share sales shrink 16% in the first six months this year, compared to a year ago, according to LSEG data.

Still, operators of Hong Kong’s stock exchange have pointed to signs of pickup in the third quarter as Beijing unveiled a raft of stimulus measures to bolster its flagging economy.

Vice premier He, a close confidant of President Xi Jinping, has been tasked with tackling China’s government debt crisis and protracted property downturn, which have strained the regions financial stability and stunted economic growth momentum.

Earlier this month, Chinese authorities took further steps to attract foreign investment, including lowering the capital threshold for foreign investors holding a non-controlling stake in an enterprise. Under the new regulations, foreign individuals are now allowed to invest in publicly-listed companies.

PBOC governor Pan Gongsheng also said in a meeting on Nov. 7 that that China would continue to implement accommodative monetary policy and bolster ties between domestic and foreign financial markets. Representatives from 11 foreign institutions including HSBC, Standard Chartered and Citigroup attended that meeting, according to a statement.