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Chapter 4

Financial and Monetary Affairs

As Asia's premier international financial centre, Hong Kong is first in finance efficiency according to the World Competitiveness Yearbook, and also first in rankings in terms of equity funds raised through initial public offerings for two consecutive years. With a 246,000-strong workforce, the financial sector contributed to 17.6 per cent of the local economy in 2016.

Hong Kong as International Financial Centre

Hong Kong is a vibrant global financial centre invigorated by a sophisticated financial infrastructure, world-class financial professionals, high level of liquidity and efficiency. With its prime location in the heart of Asia, the city forms a 24-hour continuous trading system worldwide with leading global financial hubs including New York and London. Its extensive geographical, cultural and linguistic links with the dynamic Mainland economy and financial system, fortified by the principle of 'one country, two systems, also accord Hong Kong a unique position in the increasingly integrated global financial system.

The robustness of Hong Kong's financial services industry lies in its excellent communications with the rest of the world, the rule of law, a level playing field for conducting business, a sound regulatory regime, an absence of restrictions on capital inflows and outflows, an emphasis on investor protection, and a well-educated workforce and ease of entry for non-local professionals. The city's financial markets are governed by effective and transparent regulations that are in line with international standards.

Hong Kong is not only the world's most competitive economy, it also topped rankings in finance efficiency compiled by the International Institute for Management Development's World Competitiveness Yearbook 2016. An International Monetary Fund (IMF) Mission, following the 2016 Article IV Consultation, also commended Hong Kong for its strong policy frameworks, vigorous regulation and supervision of the financial system and ample buffers that bolstered the resilience of Hong Kong to weather any unfavourable environment. Testifying to Hong Kong's role in the international arena, the Chief Executive Officer of the Securities and Futures Commission (SFC) was appointed Chairman of the Board of the International Organisation of Securities Commissions in 2016. Active participation of the city's regulators in global standard- setting bodies advances Hong Kong's and Asia's interests and influence in the development of international regulatory standards and policies for the financial sector.

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