Vice premier announces supportive measures for HK

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Visiting Chinese Vice Premier Li Keqiang announced here on Wednesday that new policies and measures have been adopted by the central government to support Hong Kong's development and deepen the economic and financial cooperation between the mainland and Hong Kong.

The policies, which were announced in Li's keynote at a forum in the day, mainly focuses on the opening of the mainland market to Hong Kong in trade of services, support for Hong Kong's standing as an international financial center and Hong Kong's development of RMB business.

Li said the policies and measures were "consistent with our policy of opening to Hong Kong first under the 'one country, two systems' and aimed at taking mainland-Hong Kong economic and financial cooperation to a new high." In terms of services trade, Li said that the mainland will take further steps to broaden market access for both traditional and emerging service sectors in Hong Kong, including medical services, construction services, legal services, and testing and certification, and will support Hong Kong travel agencies in setting up businesses on the mainland.

Thresholds for professional service suppliers will also be lowered, and the central government will continue to push the " early and pilot implementation" exercises in Guangdong and other provinces and municipalities, Li said.

He said the aim is to basically achieve liberalization of services trade before the end of the 12th Five-Year Program period.

On the financial front, Li acknowledged that Hong Kong's financial sector is "where its core competitiveness lies" and the central government will help beef up its status as an international financial center.

Specific measures include the launch of the exchange-traded fund constituted by Hong Kong stocks, encouraging more mainland- based enterprises to get listed in Hong Kong, allowing Hong Kong- invested banks on the mainland to engage in mutual fund business, the vice premier said.

Hong Kong banks and insurance companies will also be allowed to play a bigger role in the mainland, Li said, adding that support will be provided for building Hong Kong into an international asset management center, which will help Hong Kong and the mainland work together to overcome the impact of international financial volatility.

As Hong Kong aspires to build itself into an offshore RMB center, the vice premier also brought encouraging news for the city this time.

Li said the central government will "actively support the growth of the RMB market in Hong Kong", expand RMB circulation channels between Hong Kong and the mainland, and support the innovation and development of offshore RMB financial products in Hong Kong.

He said "cross-border trade settlement in RMB should be extended to cover the whole country. Pilot projects for foreign banks to replenish capital with RMB will be launched and support will be given to Hong Kong enterprises in making direct investment on the mainland in RMB."

The RMB Qualified Foreign Institutional Investors (RQFIIs) will be allowed to invest in mainland securities markets with an initial size of 20 billion RMB yuan, the vice premier said.

In addition, the amount of RMB bonds issued by mainland institutions in Hong Kong will also be raised. "We will gradually increase the size of issuance and work for the development and improvement of the RMB bond market in Hong Kong," Li said.

Hong Kong is also expected to have closer interactions with other economies within the framework of international and regional organizations as the Chinese central government will support Hong Kong in its participation in such cooperation mechanism.

The vice premier also pledged to give more policy support to help enterprises in both the mainland and Hong Kong to "go global" together.

Li noted at the end of his speech that the policies and measures announced on the day is a testament to the central government's firm resolve to support Hong Kong's development and he promised the central government will exert its utmost to do everything that contribute to prosperity and stability of Hong Kong and to the common development of Hong Kong and the mainland.