Asia Financial Forum 2021- day 1

The Asia Financial Forum (AFF) was jointly organised by the Hong Kong Special Administrative Region (HKSAR) Government and the Hong Kong Trade Development Council and was held on January 18-19, 2021. More than 5 000 influential global policymakers, financial experts, business leaders, economists, investors and entrepreneurs from 70 countries and regions signed up to participate online for the first time to examine opportunities and challenges for finance, investment and business in the new global economic landscape.

The theme of the two day form was “Reshaping World Economic Landscape” and, was opened by the Chief Executive, HKSAR Government, Mrs Carrie Lam, who delivered an opening address. Mr Guo Shuqing ,the Secretary of Party Committee of the People’s Bank of China and Chairman of the China Banking and Insurance Regulatory Commission gave a keynote speech.

Mrs Lam pointed out in her opening address that Hong Kong’s fundamentals remain strong amidst the challenges of the COVID-19 pandemic. “Hong Kong’s financial system has demonstrated its strengths and resilience. Our financial markets continue to operate orderly, and that includes the Linked Exchange Rate System.”

She advised that the liquidity in the capital markets of the city was remarkable, with an average daily turnover in December up 49 per cent over the same period in 2019. “With its unique advantages as the international financial centre of China and one of the world’s major financial cities, Hong Kong will continue to see enormous opportunities when the pandemic is over”, she added. “We continue to be an ideal gateway between the Mainland and the rest of the world. That very much includes our role as both a conduit for foreign capital investing in the Mainland and the springboard for Mainland companies looking to international markets.”

As the HKSAR Government is working to expand the flow of capital and people to create new markets and business opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area (Greater Bay Area), Mrs Lam said she had no doubt that the Wealth Management Connect, which will allow Greater Bay Area residents to carry out cross-boundary investments in wealth management products distributed by banks in the area, will attract a wealth of international financial institutions given the huge potential investor base in the Greater Bay Area.

Mr Guo in his keyote speech said that “Hong Kong has played a pivotal role in every stage of the country’s development in the past 40 years”. He highlighted that “Hong Kong is not only China’s Hong Kong, but also Asia’s Hong Kong and the world’s Hong Kong. Hong Kong will regain its vitality in the new development stage of China and Asia”. He added that “Hong Kong is vital to the country’s new development pattern of dual circulations.”

Other speakers in the morning session included the Secretary for Financial Services and the Treasury, Mr Christopher Hui, who chaired the plenary session on “Reshaping World Economic Landscape”. Mr Hui shared insights with heavyweight policymakers and international organisation leaders on the role of the financial services sector in contributing to the bolstering of economic recovery and the opportunities for financial services in the new economic landscape. Joining Mr Hui were the Minister of Finance of Luxembourg, Mr Pierre Gramegna; the President and Chairman of the Asian Infrastructure Investment Bank, Mr Jin Liqun; the President of the Islamic Development Bank, Dr Bandar M H Hajjar; the President of the New Development Bank, Mr Marcos Troyjo; the Vice-President of the European Investment Bank, Professor Teresa Czerwińska; and the Minister of State at the Department of Finance of Ireland, Mr Sean Fleming.

The Chief Executive of the Hong Kong Monetary Authority, Mr Eddie Yue chaired a policy dialogue with the Governor of the Saudi Central Bank, Dr Ahmed Alkholifey; the Deputy Governor of Central Bank of Malaysia, Ms Jessica Chew Cheng Lian; the Commissioner of the Financial Services Agency of Japan, Mr Ryozo Himino; and the Country Director for China and Mongolia, and Director for Korea of The World Bank, Mr Martin Raiser being the speakers. They exchanged views on the effectiveness of fiscal and monetary policies in supporting growth, and the implications of increasing use of financial technology (fintech) from the regulators’ perspective.

Among the highlights of the first-day programme was the keynote speech delivered by 2018 Nobel Laureate for Economic Sciences, Professor Paul Romer. He analysed the current state of the global economy and posted the path towards a new and sustainable growth engine. He stated that the private sector needed to drive innovation and that Asia was beginning to outperform Europe and the US. He advised with interest rates so low that we were not seeing much corporate investment in terms of building things with the capacity to drive innovation.Instead of regular transactions corporate investment should be making new things possible.

Professor Romer continued when asked about challenges being faced with “we do not measure it [innovation] effectively” and “are we doing it differently and how important is it ?” He added “How are we encouraging it?” Leadership will play and important role and in sustaining growth. “ Insist on facts” he stated “so policy makers can get on with it. Problems aren’t that hard to solve so we need consensus by not denying the facts.” He concluded that “facts are our friends and are key to the path of progress.”

On the question of how to balance innovation and risk he answered “diversify and expand only on those things that work well but also have the ability to shut down those things that are not working well ie with modest success.” Being a big believer in human capital Romer said that learning on the job was important- helping employees to develop better skills and the need to upskill the general labour force.

During the AFF, the Fintech Showcase, FintechHK Start-up Salon and InnoVenture Salon were set up in a virtual format this year to further promote the development of fintech. Together with the online Global Investment Zone, they presented the latest trends in financial innovation, next-generation business and investment opportunities across regions and sectors from more than 140 local and overseas international financial institutions, technology enterprises, start-ups and investment agencies.