Motion on “New Challenges Faced by Hong Kong as an International Financial Centre” (2015.06.11)

MR CHAN KIN-POR (in Cantonese): President, Hong Kong is an international financial centre. All along, the financial industry, including the securities, banking and insurance industries, has seen sound development and has made major contribution to the nation’s financial infrastructure. Nonetheless, with the gradual integration of the Mainland’s financial system with the international community, the role played by Hong Kong is diminishing. Although we can still maintain the competitiveness of the financial industry at the moment, challenges lie ahead. If we do not grasp the opportunity of the Mainland going global and enhance our financial industry, I am afraid Hong Kong may lose its status as a financial centre.

At present, there are two major opportunities which we cannot afford to miss, and they are the Mainland’s determination to press ahead with the development of the “One Belt One Road” initiative and the establishment of the Asian Infrastructure Investment Bank (AIIB). The “One Belt One Road” initiative advocates co-operation with the major countries in the world which will drive the internationalization of the Renminbi (RMB). As Hong Kong is the first offshore RMB centre, so long as we can grasp the situation, Hong Kong’s financial industry will see huge development. As regards the establishment of the AIIB, the purpose is to provide countries in need with loans, so as to assist them in the construction of infrastructural facilities. Thus, professionals, including bankers, accountants, lawyers and professional insurance practitioners, who are familiar with international and China’s financial affairs will be in great demand. Hong Kong has a large pool of these professionals. So long as the Government can play an active promotional role, there is bound to be ample room for development for the professionals.

Actually, we are surely capable of grasping the development and are well equipped in terms of professional ability and experience. However, what is worrying is that society is heading towards politicization. Even if the Government introduces complementary policies, it will very likely be subject to attack from the opposition, filibustering, or even demonization. Consequently, the golden opportunity which is in front of us now may just slip away. I hope that society will give serious consideration to these issues as they may affect the livelihood of the Hong Kong people. So long as we can grasp these opportunities, our economy will see new impetus and vitality. If our economic development can be sustained, the public can enjoy a good and prosperous life. Otherwise, since the development of other industries has long ebbed, if our economy is again barred from developing and if we fail to maintain our financial industry, how long can we rest on our laurels?

In fact, in face of the new opportunities, I am happy to see that the Government has embarked on actions. For example, the proposal to develop treasury centres is to encourage multinational enterprises to come to Hong Kong to establish treasury centres. Indirectly, the enterprises are encouraged to set up regional headquarters in Hong Kong which will enhance our competitiveness. This is the first step towards the development of headquarters economy. I wish that the Government can continue to introduce concessionary measures. It can employ more direct approaches to attract foreign capital to further propel the development of Hong Kong’s economy

Meanwhile, the Government is also aware that some of the financial sectors in Hong Kong are suffering from a shortage of talents. Therefore, it has introduced the “Pilot Programme to Enhance Talent Training for the Insurance Sector and the Asset and Wealth Management Sector”. Under the Programme, $100 million will be spent to nurture new talents for the two financial sectors which are faced with manpower shortage, with a view to boosting the further development of the financial industry and providing more quality job opportunities for the young people. Last week, the Government sent representatives to the Panel on Financial Affairs to explain the details of the Programme. I hope this is the first step and the Government will continue to introduce more programmes to nurture financial talents in the future which will benefit other financial sectors.

President, in the latter part of my speech, I will focus my discussion on the difficulties and challenges encountered by the insurance industry. In recent years, the insurance industry has come under stronger monitoring by the monitoring authority and this has affected the development of the industry. Of course, it is very important to protect the interests of consumers but in these few years, the monitoring authority has successively stepped up monitoring thereby strangling the industry. Is this doing the consumers any good?

Let me cite a typical example. In recent years, investment-linked assurance schemes have been subject to increasing monitoring, to the extent of over-monitoring. Nowadays, if a consumer wants to take out an investment-linked assurance scheme, he has to sign at least 10-odd times, undergo audio-recording or go through after-sales telephone verification. Consequently, the insurance company and the intermediary have to spend a lot of time on such monitoring measures. This is simply discouraging consumers from taking out insurance by cumbersome procedures. In the end, the industry is victimized and the consumers are in no way benefited. Actually, the purpose of asking the consumers to put down multiple signatures is not to protect them. They are only putting the onus on the consumers because once the consumers have signed, it is tantamount to admitting that they themselves will take up the responsibility. In the event of mishap, it will have nothing to do with the monitoring authority. The sector reckons that upon the implementation of a raft of monitoring measures, the sales of investment-linked assurance schemes have dropped by a half in these two months.

In the coming days, the insurance industry will roll out a host of reforms and new monitoring measures, including the establishment of a new monitoring authority for the insurance industry, the introduction of a risk-based capital structure, the establishment of a fund to protect policy-holders, the introduction of minimum requirements for the medical insurance scheme, as well as various criteria and requirements regarding the sale of products. These new measures in fact are imposing layers of restrictions on the insurance industry, and their coverage is extended to all levels of the industry, including those in charge of insurance companies, the conduct of the intermediaries, capital requirement, product design, product sales and even the medical insurance scheme. All the aforementioned aspects will come under stronger monitoring, which is like imposing limitations within a short span. Hence, the operation of the insurance industry will become increasingly difficult.

At the moment, the insurance industry is like a car in motion. However, someone is applying the brake incessantly and it is impossible to step on the accelerator. How can it move forward? The insurance industry hopes that after the introduction of so many measures, the Government can give the insurance companies and the intermediaries sufficient time to recuperate and adapt to the various monitoring requirements, as well as to ponder how they can provide consumers with better service under a strict monitoring environment. This is the best arrangement for the industry and the consumers. I wish the Government can understand. I so submit.

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