The 'Belt and Road' initiative has attracted significant attention and strong resonance from within China, relevant countries and regions, and even the entire world. The reason for such a tremendous impact lies in the profound significance and infinite opportunities contained within this grand vision. As a financial center, trade hub, and shipping nexus, Hong Kong can leverage its unique advantages in the national promotion of the 'Belt and Road' construction, thereby gaining greater development opportunities.
CITIC Bank (International) Chief Economist Liao Qun: Leverage Central Advantages, Serve as a Connecting Hub
Mr. Leung Chun-ying, Chief Executive of the Hong Kong Special Administrative Region, and Mr. John Tsang, Financial Secretary, have recently delivered speeches on multiple occasions, stating that the 'Belt and Road' is a once-in-a-lifetime opportunity for Hong Kong, while emphasizing that Hong Kong, with its unique advantages and conditions, can serve as a hub within the 'Belt and Road'.
A hub is a center that connects two or more parties. In fact, for many years, Hong Kong has been the connecting center for exchanges between the Mainland and the world. The 'Belt and Road' is essentially the connectivity between China and the countries along the 'Belt and Road' routes; Hong Kong should naturally and rightfully play the role of a connecting center. Broadly speaking, Hong Kong is expected to become the four major centers in the 'Belt and Road' strategy: an investment center, a financing center, a professional services center, and an operational support center.
Hong Kong has always been an outbound investment center, with overseas investment assets reaching 5 trillion US dollars. First, the private capital strength in Hong Kong is very strong, and there is no shortage of entrepreneurs with massive funds. More importantly, most of the 'Belt and Road' funds will come from the Mainland, and much of this will be invested through Hong Kong. One data point worth mentioning here is that in recent years, China's Outbound Direct Investment (ODI) has exceeded 100 billion US dollars annually, with nearly 60% of these investments destined for Hong Kong. Naturally, Hong Kong cannot absorb such large investments locally; in reality, these funds are invested into investment holding or management companies established in Hong Kong, and are ultimately directed abroad through these entities. Therefore, it is not difficult to envision that much of the capital invested by the Mainland into the 'Belt and Road' will also first be injected into Hong Kong's investment holding or management companies before being practically deployed into overseas 'Belt and Road' projects. In this way, Hong Kong will naturally become an investment center for the 'Belt and Road'.
Investment is inevitably accompanied by financing. Hong Kong has always been a financing center for Mainland enterprises, and now there is even more reason for it to become a financing center for 'Belt and Road' projects. Given the startup characteristics and infrastructure nature of 'Belt and Road' projects, what will be needed in the initial stages are syndicated loans and debt financing. Hong Kong is Asia's syndicated loan center, and Hong Kong banks are very much looking forward to 'Belt and Road' syndicated loan projects and have sufficient capacity to undertake them. Bond issuance, especially RMB bond issuance, has developed rapidly in Hong Kong in recent years. As 'Belt and Road' projects are mostly initiated or led by China and involve the procurement of Chinese-made equipment, they will be denominated in RMB, making it logical to issue RMB bonds in Hong Kong for financing. After a period of time, some 'Belt and Road' projects may also strive to be listed on the Hong Kong stock market during or after their construction. The Hong Kong stock market is the most developed in Asia and will surely become an ideal market for the continuous financing of 'Belt and Road' projects in the future.
Although most 'Belt and Road' projects are directed toward developing countries, they are also international investments and will follow international standards. International standards require professional services of international caliber to ensure their implementation, including international legal and dispute resolution services, as well as insurance and reinsurance, accounting and auditing, rating and project evaluation, and professional services such as project consulting and management. Hong Kong possesses a legal system and market rules that are aligned with international standards, as well as strict supervision, comprehensive regulations, professional talent teams, a full range of professional service firms, free flow of information, and a bilingual environment in Chinese and English. All of these will ensure that the various professional services provided for 'Belt and Road' projects meet international standards.
The 'Belt and Road' also relies on the effective support of operational systems. First is the hardware operational network. Hong Kong is an international shipping and logistics center, and its shipping and logistics networks have always been aligned with international standards, which will surely contribute to the smooth operation of 'Belt and Road' projects. Second is personnel exchange and communication in terms of soft power. The effectiveness of an international operational system also depends on the smoothness and effectiveness of exchanges and communication between parties from various countries. In this regard, it is necessary to emphasize that Hong Kong possesses significant advantages over Mainland cities in terms of exchanges and communication with the world.