HK’s superconnector role is here to stay

China's high-quality development requires a healthy capital market that connects the primary and secondary markets, where Hong Kong can give full play to its superconnector role channeling international capital, says Wu Bo, chief financial officer of China International Capital Corporation (CICC).

In the nation's new development paradigm, the drive for high-quality development, aimed at making the economy more innovative, efficient and sustainable, is the foremost task in building a modern socialist country by midcentury.

"When we talk about high-quality development, it means we've to move low-end techniques toward innovation-driven production to tackle critical technological bottlenecks," Wu tells China Daily, citing chips, aircraft engines and artificial intelligence applications, all of which are in dire need of long-term capital support with a high level of risk tolerance.

"A healthy capital market is an inevitable option for the nation's innovative development and the real economy's high-quality development, during which Hong Kong's international perspective can play a big role," he says.

For decades, Hong Kong's status as a global financial hub has made it a prime offshore fundraising hub for Chinese mainland firms.

More than 1,400 mainland enterprises have raised HK$8.3 trillion ($1.06 trillion) in the city over the past 30 years. Today, their combined market value stands at around HK$28 trillion, accounting for a remarkable 77 percent of total market capitalization, according to Hong Kong Exchanges and Clearing, the local bourse operator.

Founded in 1995 as the first global joint-venture investment bank in China, CICC has acted as a key booster in helping the restructuring and overseas listings of large State-owned and private enterprises. It now sees Hong Kong as a linchpin of growth in cross-boundary business and in the Guangdong-Hong Kong-Macao Greater Bay Area — a vast economic zone encompassing the Hong Kong and Macao SARs and nine mainland cities in Guangdong province.

With a population of 87 million, the 11-city cluster's economic output topped 13 trillion yuan in 2022 — 2.8 trillion yuan more than in 2017 — data from Guangdong's Development and Reform Commission show.

"It's expected that the Greater Bay Area will make use of Hong Kong's internationalization platform and expand its advantage to a wider region. And, it has a lot of ambitions in the internationalization of the renminbi and the country's capital market," says Wu.