By Selena Li and Kane Wu
HONG KONG (Reuters) – Hong Kong’s central bank head said on Wednesday that he expects Chinese capital flows going through Hong Kong to provide the biggest opportunity for the financial hub in the next few years.
Hong Kong is making plans to make a wealth connect programme with China’s Greater Bay area less restrictive and exploring whether it can extend its coverage to more mainland cities, Eddie Yue, chief executive of Hong Kong Monetary Authority, said at HSBC’s Global Investment Summit in Hong Kong.
“I think the bigger opportunity in the next few years will come from what we call Southbound, Chinese capital going out to the world through Hong Kong,” Yue said, compared to northbound flows that are offshore capital going into the mainland.
Global investors have been accessing Chinese assets through the offshore investment hub, but a weaker outlook for the world’s second-biggest economy and geopolitical uncertainties have slowed foreign capital inflows in recent years.
Chinese investments overseas, however, have picked up and Hong Kong has benefited from these capital flows.
That trend is expected to strengthen in the years ahead, Yue added, as Chinese investors continue to utilise stock, bond and wealth management connect channels to invest in the offshore investment hub.
“I’m quite hopeful that all these Southbound capital coming out from China into the world through Hong Kong will help provide the next push for Hong Kong’s capital markets,” he said.
Between 20% to 30% of Hong Kong stock market’s turnover is capital flowing from China through the stock connect, according to Yue.
(Reporting by Selena Li and Kane Wu; Editing by Christian Schmollinger and Shri Navaratnam)
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