Source: Hong Kong Government special administrative region
Following is the speech by the Financial Secretary, Mr Paul Chan, at the Hong Kong FIC & Bond Connect Summit today (July 7):
Kelvin (Chairman of the Securities and Futures Commission (SFC), Dr Kelvin Wong), Eddie (Chief Executive of the Hong Kong Monetary Authority (HKMA), Mr Eddie Yue), Julia (Chief Executive Officer of the SFC, Ms Julia Leung), Bonnie (Chief Executive Officer of the Hong Kong Exchanges and Clearing Limited, Ms Bonnie Chan), distinguished guests, ladies and gentlemen,
Increasingly, renminbi financing is part of that success story. Dim sum bond issuance has exceeded RMB1 trillion in each of the past two years, with outstanding stock surpassing RMB1.6 trillion. In 2025, we saw first-time issuances by the Government of Indonesia and the Development Bank of Kazakhstan – and Indonesia is back again this year. International issuers increasingly see Hong Kong as a natural venue for offshore renminbi financing.
The HKSAR Government has a role to play as an issuer and market builder. In May, our multi-currency, multi-tenor green and infrastructure bond issuance attracted investors from more than 30 jurisdictions across Asia, Europe, the Middle East and the Americas, with an order book 8.6 times the issuance size.
On the fintech front, we made early moves in applying tokenisation to government bond issuance. Beyond our own issuances, we are working with the market to develop the broader FIC ecosystem, including the use of tokenisation and distributed ledger technology in the fixed income market. These measures help us build a market that is deeper, more efficient and accessible, and better able to connect Mainland opportunities with global capital.
Hong Kong’s Value Proposition
Taken together, the developments above point to Hong Kong’s distinctive value proposition. International capital turns to Hong Kong for more than market depth. It’s here because Hong Kong offers two things at the same time: an open, trusted and well-regulated platform; and efficient access to the opportunities arising from the Mainland’s continued development.
This combination matters even more in the current geoeconomic environment. As investors reassess allocation, liquidity and risk across markets, they look for platforms that are open, stable and predictable. Under the “one country, two systems” framework, Hong Kong continues to give them the confidence they seek.
At the same time, investors are keen to seek exposure to the Chinese Mainland’s steady long-term growth and technological innovation. Hong Kong is where that access can be achieved through market practices that international investors understand and trust. Hong Kong is chosen not because of geographic proximity, but our institutional strengths.
Figures in respect of our Connect Schemes speak volumes about this. Today, more than 70 per cent of international investors’ A-share holdings were acquired through Stock Connect, and around two-thirds of their Mainland bond holdings were transacted through Bond Connect. These channels have become part of the operating architecture of cross-border investment into China. As liquidity gathers here, it also creates demand for a broader range of products, better risk management tools and deeper links with the Mainland’s FIC markets.
This morning, Governor Pan announced a series of important measures to deepen two-way connectivity between Hong Kong and the Mainland. These measures will further widen the channels through which investors can access Mainland assets, allocate capital and manage risk. The HKSAR Government welcomes these initiatives, and the HKMA, the SFC and other relevant authorities will work closely with the market to implement them in a timely manner.
The second part of Hong Kong’s value proposition lies in supporting the international use of the renminbi. The country’s 15th Five-Year Plan explicitly calls for advancing renminbi internationalisation, and Hong Kong is well placed to contribute to this national strategy. Last year, we published the Fixed Income and Currency Market Development Roadmap, which sets out our vision and action agenda for strengthening primary issuance, deepening secondary-market liquidity, developing offshore renminbi business and building next-generation market infrastructure.
In the context of offshore RMB business, we will work on three fronts: first, enriching the offshore renminbi product ecosystem; second, strengthening the infrastructure that supports clearing, settlement and risk management; and third, deepening liquidity so as to serve investment and financing needs more effectively.
Not a Fragmenting System
Now, on the third question: As the international use of the renminbi expands, are we witnessing the fragmentation of the financial system?
My answer is that we should not confuse diversification with fragmentation. The wider use of different currencies is a natural response to a more multipolar global economy. Countries and companies are looking for more options in clearing, settlement and financing. They seek to reduce concentration risk, to manage external shocks, and to improve cost and efficiency; in other words, to add resilience and optionality to the regime.
The renminbi is an important part of this evolution, given China’s role as a major trading and industrial power, and the growing international appetite for Chinese financial assets.
The numbers illustrate the point. China accounts for around 12 per cent of global merchandise trade, yet the renminbi represents only about 4 per cent of global trade settlement and just 2 per cent of global central bank reserves. This does not mean the gap will be closed overnight. But it does suggest that, as market infrastructure deepens and more use cases develop, the renminbi can play a larger role in trade, investment and reserve management.
In other words, the story is not one of substitution, but of complementarity. The US dollar and other established reserve currencies will continue to play important roles. Meanwhile, more economies and market participants will use their own or regional currencies where it makes commercial and financial sense to do so. A more diversified currency system can still be an integrated one, provided that the channels of connectivity remain open, trusted and efficient.
The same logic applies to new payment and settlement infrastructures. CIPS (Cross-border Interbank Payment System), CBDCs (Central Bank Digital Currency), stablecoins and other digital solutions should not be seen simply as alternatives to existing ones. The real question is whether they can make cross-border payments and settlement more open, interoperable, efficient and cheaper. For many emerging markets, particularly those with large remittance flows and SME trade, the practical needs are clear: lower cost, faster processing, greater transparency and less friction in cross-border transactions.
What we are likely to see, therefore, is not the breakdown of the international financial system, but the gradual emergence of a more diversified network of interoperable infrastructures. The key question for the coming decade will not be which single system prevails. It will be whether different systems can work together safely, efficiently and under standards that market participants trust.
Concluding remarks
Ladies and gentlemen, as Hong Kong continues to develop its fixed income and currency markets, our choice is clear. We will strengthen connectivity, build more robust, efficient and open market infrastructure, and continue to help global capital access Mainland opportunities. The future of finance should be shaped by systems that can work together – and Hong Kong is ready to help realise that connectivity faster.
I wish this Summit every success, and all of you good health, and the best of business. Thank you very much.
Issued at HKT 15:28