Vice-Premier announces new measures to support HK

Chinese Vice Premier Li Keqiang (L) addresses an economic forum in Hong Kong August 17, 2011. [Edmond Tang/chinadaily.com.cn]

HONG KONG – Visiting Chinese Vice Premier Li Keqiang, at a forum being held here on Wednesday, announced a series of new measures by the central government to support development of Hong Kong and enhance cooperation between the mainland and Hong Kong.

China will allow Qualified Foreign Institutional Investors (QFII) in Hong Kong to use yuan deposits to invest in the mainland equities markets and the initial quota is 20 billion yuan, Vice Premier Li Keqiang said at the forum.

Li also said that the China will launch exchange-traded funds (ETFs) that invested in Hong Kong-listed stocks in the mainland’s stock exchanges.

Hong Kong banks will also be allowed to sell fund products in the mainland markets and the mainland will support their network expansion in the Guangdong province, Li said. 

Meanwhile, China will continue to develop Hong Kong as a key center for the offshore yuan settlement and will expand the pilot program nationwide, Li said. He added that China will allow more Hong Kong enterprises to use yuan to invest in the mainland.

The Ministry of Finance will issue government bonds of 20 billion yuan in Hong Kong and bonds worth of 5 billion yuan will be sold to individual investors, according to Li.

“This is to encourage more Hong Kong residents to invest in the government bond,” he said. “Issuing government bonds in Hong Kong has become a long-term arrangement by the central government.” 

The central government will further open the mainland market to Hong Kong’s service industry and the eighth additional agreement of the Closer Economic Partnership Arrangement (CEPA) will be signed this year, Li said. 

“The mainland will adopt more measures to open the market to Hong Kong’s service industry including the sectors of health care and medical equipment, construction, legal service and tourism,” he said. 

The mainland will also loosen the restriction on the standards of service providers and to further simplify the process for trade and investment between the mainland and Hong Kong, Li added. 

“We aim to realize free trade between the mainland and Hong Kong by the end of 2015,” he said.

The forum is sponsored by Hong Kong Special Administrative Region, Ministry of Commerce, National Development and Reform Commission and People’s Bank of China. It is chaired by Henry Tang Ying-yen, Chief Secretary for Administration of Hong Kong.

Six new measures to support Hong Kong 

— Greatly improve the mainland opening to Hong Kong in service trade 

— Consolidate and upgrade Hong Kong’s standing as an international financial center 

— To support Hong Kong in developing into an offshore RMB center 

— To support Hong Kong in participation in international and regional economic cooperation

— To help enterprises in both mainland and Hong Kong to go global together

— To give full play to Hong Kong’s important role in Guangdong-Hong Kong-Macao cooperation

Xinhua contributed to this story.

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