Invest and Settle in Hong Kong focuses on Hong Kong's Economy: The financial system in Hong Kong is quite different from that of the Mainland. The relationship between regulatory agencies and banks is one of equality; the operations of banks are not subject to interference from regulatory agencies, as the risks taken by banks are their own responsibility. Therefore, registering a company in Hong Kong is beneficial.
“Why is there a need to reassess bank funds today? Why have new regulatory rules been introduced? There must be a reason behind this. The regulatory agencies in Hong Kong are controlling loans to Mainland enterprises due to the increasing economic downturn risks in Mainland China. If there are risks in the Mainland, would the banks be unaware? Why are the regulatory agencies the ones to introduce rules? Unless there have been violations by banks in Hong Kong, the regulatory agencies would not have heightened risk awareness. The fact that Hong Kong's regulatory agencies issued strict regulatory measures earlier than other regions indicates that there are macroeconomic risks in China.”
The exposure of local and foreign banks in Hong Kong to risks in Mainland China has increased, with total loans reaching $798 billion. “For banks in Hong Kong, a 'hard landing' of the Chinese economy is a low-probability but high-impact downside risk.” Some economists believe that the Hong Kong banking sector's loans to the Mainland are highly diversified, with about 60% backed by collateral, making the risks manageable. As other countries, such as those in Europe, have little room for growth in loan business, the growth rate of loans to the Mainland by Hong Kong banks has been relatively fast in recent years, but still falls within a reasonable and normal growth rate.
