The China Banking and Insurance Regulatory Commission provided more assurances about the stability of Hong Kong’s financial system and its status as a global hub.
«Hong Kong is capable of responding to all kinds of risks and challenges,» according to a «Caixin» report citing a CBIRC spokesperson at a press conference last week.
Sound legal and financial systems, numerous educated financial professionals, strong economic foundation and a «world-class business environment» were all cited as major factors that continue to bolster Hong Kong’s status. Also cited was the city’s foreign exchange reserves of $440 billion and a fiscal reserve of more than HK$1 trillion ($129 billion).
Hong Kong’s role as a global financial hub will be further consolidated, the CBIRC spokesperson added.
Win-Win
The statements followed threats of sanctions from the U.S. over disagreements on a newly proposed national security law for Hong Kong.
The CBIRC spokesperson said sanctions would harm «others without benefiting oneself» and that any damage to financial stability would not be in the interest of local, mainland or foreign financial institutions, including those from the U.S.
HKD/USD Peg
Top authorities in Hong Kong have also echoed similar confidence in retaining the status quo in Hong Kong, highlighting the HKD/USD peg.
The Hong Kong Monetary Authority made reassurances about the free flow of capital and free convertibility of the Hong Kong dollar, stressing that there was no need nor plan to make changes to the well-established peg. Hong Kong’s financial secretary Paul Chan told state media that a currency swap line with China’s central bank was available if the time came for such a need.
Meanwhile, money changers in Hong Kong are reportedly experiencing large influxes of demand for U.S. dollar in exchange for Hong Kong dollars. In one case, a small shop unwillingly turned away 600 customs after weekly demand suddenly increased 10-fold.
