Hong Kong’s participation in the Belt and Road Initiative
MR CHAN CHUN-YING :
Thank you, President. In the main reply the Secretary set out many government initiatives to promote B&RI, but actually there are many Islamic countries along the Belt and Road and their development projects are closely related to Islamic financial services. In 2014, 2015 and 2017, three sukuk totalling US$3 billion were issued in Hong Kong, and we were also the first AAA-rated government in the world to issue USD-denominated sukuk with a 10-year tenor. Moreover, 57% of the last batch of these bonds was allocated to Asian investors, 25% to Middle East investors and 18% to European investors, and this has fully reflected some of our advantages as an international financial centre.
In this connection, to better participate in the development of B&RI, we should at the same time take up a certain role in Islamic finance. President, my question is: What does the Government think about the next step of development?
UNDER SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY:
Thank you, President. I very much thank the Member for his supplementary question. As the Member has said, the Belt and Road covers quite a number of Islamic countries and therefore, Islamic finance plays a crucial role in financing in the region. To promote the development of Islamic finance including the sukuk market in Hong Kong, actually we have taken a diversity of concrete measures. Apart from the sukuk issued by us as mentioned by the Member just now, in order to build a conducive platform for sukuk issuance, we amended our laws in 2013 and 2014 respectively to provide a tax structure for sukuk which is comparable with that for conventional bonds, and to allow for the issuance of sukuk under the Government Bond Programme.
Hong Kong has already demonstrated the viability of its platform for sukuk issuance, and our legal, regulatory and taxation framework can readily support sukuk issuances, including sukuk of different structures. In fact, many Islamic financial products and services have been introduced in the market of Hong Kong, including the listing of global sukuk on the Hong Kong Stock Exchange, Islamic funds and Islamic banking windows.
Looking ahead, we will continuously strengthen the promotion of the merits of Hong Kong’s financial system and market to Belt and Road countries and regions, so as to attract foreign investment and financing activities in Hong Kong, including market institutions and stakeholders who are interested in taking part in our Islamic financial activities. Thank you, President.