Hong Kong is one of the world’s most open economies with a business-friendly environment characterised by free trade. Nevertheless, with a mature financial regulatory regime and legal system. A city with simple taxation and low tax rates, along with advanced transport and telecommunications infrastructures.
Hong Kong’s financial markets offer high levels of liquidity. It is governed by effective and transparent regulations that are in line with international standards. Together with other important financial centres, such as London and New York. Hong Kong’s markets play a vital role in the global financial system which operates round the clock. Hong Kong also provides an important gateway to the Mainland China economy and financial system. The financial sector employs 246,000 people. This accounts for 6.5% of the city’s total workforce, and 16.6% of its GDP. Hong Kong was the world’s seventh- and Asia’s second-largest banking centre, with assets HK$22.7 trillion in October 2017. The asset management business is highly international. About 71% of assets under management coming from investors outside Hong Kong.
The overriding objective of Hong Kong’s monetary policy is currency stability defined as a stable external exchange value of Hong Kong’s currency against the US dollar. As a rule of around HK$7.8 to US$1. The interbank money market is also well established, supported by a robust real-time gross settlement interbank payment system enabling transactions in US$, HK$, Euro and Renminbi to be settled in real time.
Amid continuing internationalisation of RMB, Hong Kong is the world’s largest offshore RMB business hub in the World. On the whole, supporting cross-border trade transactions, investment, financing and asset management. As well as the development of RMB bonds, loans and equity products. In 2016, RMB trade settlement handled by banks in Hong Kong amounted to RMB4,542 billion and RMB deposits amounted to RMB625 billion.
Active international engagement and cooperation with global partners, such as membership of the Asia-Pacific Economic Cooperation forum, World Trade Organisation, World Customs Organisation, etc. Also, participation in the Trade Service Agreements of the World Trade Organisation, and the automatic exchange of financial account information in tax matters (“AEOI”) coordinated by the Organisation of Economic Co-operation and Development (“OECD”), proven Hong Kong is able to maintain its status as an international financial and trading centre. In 2016, the city accounted for 3.3% of world merchandise trade amounting to US$1,064 billion, its principal trading partners being Mainland China, the US and Taiwan.
Hong Kong is an active participant in global standard-setting bodies such as the International Monetary Fund, the World Bank, the Basel Committee on Banking Supervision, the International Organisation of Securities Commissions, the International Association of Insurance Supervisors, the FATF and the APG.
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