As the number of millionaires in the Asia-Pacific region approaches that of North America, the Hong Kong Monetary Authority (HKMA) has announced plans to prioritise its asset and wealth management industry – but will still promote its yuan and treasury management businesses.
“The challenge for Hong Kong lies in building its brand as a wealth management hub that stands for quality, reputation and confidence,” said HKMA chief executive Norman Chan Tak-lam, but added: “The HKMA is working closely with the Financial Services and the Treasury Bureau to review taxation arrangements to encourage more multinational and mainland corporations to establish treasury management centres in Hong Kong,” he said.
Chan also said that emphasis would be placed on boosting the fund industry, which continues to use Hong Kong primarily as a sales centre whilst broader operations are run from London or New York. Welcoming the support, Hong Kong Investment Funds Association chief executive Sally Wong said: “We believe that with initiatives such as open-ended funds and the mutual recognition of funds, more high-value-added jobs would open up, further bolstering Hong Kong’s role as an asset management hub.”
Over the next five years, the HKMA would also be committed to tightening regulations on mainland lending by local banks, said Chan. By the end of 2013, the total value of loans in this category hit HK$2.6 trillion, making some commentators nervous about the island’s ability to cope with an economic downturn. “Banks should manage the associated risks and challenges,” said Chan.
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