ENG-2009 — Page 125

Financial and Monetary Affairs 1 77

Anti-Money Laundering and Counter Financing of Terrorism

Hong Kong watches closely its anti-money laundering (AML) and counter financing of terrorism (CFT) programme to maintain a safe business and investment environment. A high-level Central Co-ordinating Committee on AML and CFT, chaired by the Financial Secretary, is in place to give steer on this policy area.

Financial Links with the Mainland

Strengthening financial co-operation with the Mainland is one of Hong Kong's key strategies in enhancing its competitiveness as an international financial centre. The Government continues to seize the opportunities presented in the 'one country, two systems' principle to promote Hong Kong's financial services.

The Government endeavours to meet the Mainland's overall development needs and to contribute to its prosperity and financial security by:

(1) Building on Hong Kong's strength as an international market and enhancing the quality and competitiveness of its market to attract international talent, capital, financial institutions and products;

(2) Strengthening Hong Kong's position as a testing ground for liberalising the Mainland's capital account and regionalising and internationalising the RMB, and building a market capable of offering a broad range of RMB products and services;

(3) Leveraging on pilot measures to improve a two-way flow of financial products, capital and talent between Hong Kong and the Pearl River Deltal region and to set up financial institutions in both places;

(4) Serving as the preferred capital-raising centre for Mainland enterprises operating outside the Mainland, providing equity listing, bond issuance, international asset management and hedging services. In this regard, Hong Kong can act as the bridgehead for Mainland entrprises to enter the international market; and

(5) Strengthening the links between Mainland and Hong Kong financial markets in the areas of market infrastructure, information sharing, and regulatory co-operation to reinforce security of cross-border capital flows.

In December 2009, Premier Wen Jiabao pledged the nation's support for consolidating Hong Kong's role as a testing ground for launching the country's financial reforms. Specifically, he endorsed further development of the following initiatives:

• RMB business, including cross-boundary trade settlement;

• RMB financing and direct investment;

• RMB bond business;