ENG-2019 — Page 94

Chapter 4

Financial and Monetary Affairs

Hong Kong is well-recognised as the world's premier international financial centre, connecting opportunities between the Mainland market and the rest of the world. The city's vibrant financial sector has a workforce of over 260,000, contributing to 19.8 per cent of the local economy.

Hong Kong as International Financial Centre

With its favourable location in the heart of Asia, Hong Kong is firmly anchored in the increasingly integrated global financial system. The city's trading system plugs fully into the round-the-clock global financial trading cycle and provides certain and seamless connectivity with other major financial hubs. Within a five-hour flight time, key markets in Asia and half the world's population can be reached from Hong Kong. As part of China, Hong Kong is blessed with the advantages of one country, two systems. The city has close geographical, cultural and linguistic links with the Mainland, and yet it retains the uniqueness that sets it apart from Mainland cities.

Hong Kong's unique fundamental strengths include the rule of law, an independent judiciary, open market, free flow of capital and information, deep liquidity, strong emphasis on investor protection, well-educated and highly efficient workforce and ease of entry for non-local professionals. Its financial markets are characterised by effective and transparent regulations aligned with international standards. These strengths contribute to Hong Kong's unique position as the business bridge between the Mainland of China and the rest of the world.

The city's status as a leading international financial centre is widely acknowledged: the International Monetary Fund Staff Mission, following its 2019 Article IV Consultation, once again commended the resilience of Hong Kong's financial system and the Linked Exchange Rate System, noting that many years of prudent macroeconomic policies had afforded the city ample buffers to navigate through cyclical and structural challenges.

To strengthen its competitiveness, Hong Kong improves the regulatory framework and promotes market development and the application of financial technology to increase productivity, enhance financial inclusion and drive sustainable development. The city will also step up efforts in capitalising on the emerging opportunities from the development of the

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