Yi Huiman, the chairman of China’s financial regulator, called the maintenance of Hong Kong’s de facto international hub status as beneficial to «China, the world and the new era».
«We should see that Hong Kong is not only China’s Hong Kong, but also the world’s Hong Kong,» Yi said in a report by «Caixin» (behind paywall).
«In this sense, letting Hong Kong fully play its role as an international financial center is in the interests of China, the world and the new era».
According to Yi, Hong Kong has played an «irreplaceable and unique role» in the reform and opening up of the mainland capital market in the last 40 years. Its status as an international financial center is «increasingly consolidated» betaking advantage of its geographical advantages and the «one country, two systems» institutional environment.
Friendly Exchanges
Despite Hong Kong’s role, Yi also spoke of the need to foster a healthy environment via competition from exchanges in Shanghai and Shenzhen though he added that cooperation was still the «mainstream trend», citing examples such as the Shenzhen-Hong Kong Stock Connect scheme.
«If there is only one exchange, the quality of service will not improve,» Yi said, lauding the diversity that the different bourses provide. «It is a good thing that the three exchanges offer a wide range of options. As regulators, we are happy to see it happen, and we respect the market’s choice.»
U.S.-China Cooperation
Yi also shared his views on U.S.-China relations in the field of financial regulation where he said that the China Securities and Regulatory Commission strongly valued open cross-border cooperation.
«It is the common responsibility of securities regulatory authorities of all countries to improve the information disclosure of listed companies and protect the legitimate rights and interests of investors,» Yi said, underlining issues such as auditing standards and joint inspections.
Luckin Coffee: A Tumor
On the disgraced Luckin Coffee, Yi noted that the scandal did not represent all Chinese companies listed in the U.S. but described the matter as «a tumor on the capital markets and is the target of both Chinese and foreign regulators».
«Companies must have a profit model. If a company operates by burning money, telling stories, fueling speculation, but has no capability for continuity of operations and incurs long-term losses, it is not suitable to go public,» Yi said. «This is a consensus among all regulators.»
