CBN丨Central government bolsters Hong Kong support with larger Connect scheme

Hi everyone. I’m Stephanie LI.Coming up on today’s programHong Kong kicks off its annual flagship financial summit with the largest mainland delegation;Guangzhou becomes the first tier-1 city to grant permanent residency to homebuyers.Here’s what you need to know about China in the past 24 hoursChinese Vice-Premier He Lifeng has urged Hong Kong to go big on reforms to foster development while raising its status as an international finance hub, with the state leader speaking at the city’s flagship industry summit.The three-day Global Financial Leaders’ Investment Summit, organized by the the Monetary Authority opened to a 300-capacity audience on Monday.Speaking in his keynote address on Tuesday, the state leader highlighted three areas of focus for Hong Kong’s finance sector: deepen financial reforms and innovate to boost the city’s competitiveness; expand cooperation and opening up; and dovetail with national developments.The central government will help more mainland companies list in Hong Kong, improve mutual market access, issue treasury bonds and strengthen its position as a global offshore yuan hub, which will help the city become a stronger international financial centre and support China in opening up its economy, He said.He added that the financial cooperation in the Greater Bay Area will be deepen, including interfacing the rules and mechanisms between mainland cities in the GBA, Hong Kong and Macao.China’s securities regulator also gave its strongest endorsement yet to expand and add financial products to a trans-border investment channel with Hong Kong.Wu Qing, Chairman of the China Securities Regulatory Commission (CSRC), said commodities may be added to the stocks, bonds, options and wealth management products that are currently tradable in the Connect scheme, which allows global investors and mainland capital to tap into each other’s markets via Hong Kong.Delivering his welcoming remarks, Hong Kong’s acting Chief Executive Eric Chan Kwok-ki said the city should look to meaningful opportunities for growth in emerging sectors such as fintech and green and sustainable finance.“Investors are increasingly seeking opportunities that align with sustainable development goals, and green technologies and green finance were central to that goal,” said Chan.This year’s event is attended by the biggest delegation of top Chinese officials on-site since the annual event began in 2022. Top executives from HSBC, Goldman Sachs, JPMorgan Chase, Citigroup, BNP Paribas, among many others, are also in town in a show of support for Hong Kong, a key profit centre for many of them and a major regional headquarters for others.Beijing followed Shanghai on Tuesday to eliminating the distinction between ordinary and non-ordinary housing and expanding tax incentives for property transactions. This means that homeowners selling apartments purchased over two years prior will be exempted from the 5 percent of value added tax in both first-tier cities. Apartments larger than 144 square meters or those intended for commercial use are generally considered "non-ordinary".Greater Bay Area, Greater futureGuangzhou is set to become the first Chinese first-tier city to introduce a policy allowing home buyers to receive a permanent residence permit. Individuals who buy an apartment in seven suburban districts and have paid social security in Guangzhou for at least one year can apply to obtain residency status, also known as hukou, according to a draft policy issued by the local government yesterday.Guangzhou will purchase stock commercial housing below 90 square meters in the city as affordable housing. The city government-owned Guangzhou Anju Group announced on Tuesday that it will start buying residential properties for affordable housing and outlined the criteria for the properties it is seeking, which now expands to cover the entire city.The 19th China International Small and Medium Enterprises Fair in Guangzhou drew more than 10,000 buyers and 120,000 visitors, generating intended transactions worth over 96 billion yuan a year. The fair featured companies from the low-altitude economy, high-end equipment, robotics core components, biomedicine, advanced medical equipment, and other sectors this year. Earnings reports expressXiaomi’s third quarter profit rose 9.7 percent from a year earlier after the Chinese electronics giant increased the price of its handsets and saw more shipments. Net profit stood at 5.3 billion yuan in the three months, while revenue surged 31 percent to 92.5 billion yuan. Its auto unit delivered 39,790 units of its first EV, the SU7, last quarter, having produced 100,000 units as of Nov. 13. The company has raised its annual delivery target to 130,000 from 120,000.EHang’s net loss narrowed 28 percent to 48.1 million yuan in the third quarter from a year earlier, the Chinese drone maker said in a financial report. Revenue surged 348 percent to 128 million yuan.Trip.Com's net profit jumped 47 percent to 6.8 billion yuan and revenue rose 16  percent to 15.9 billion yuan in the third quarter of the year from a year earlier, the Chinese online travel agency announced today. Offshore hotel and outbound flight bookings in the quarter have recovered to 120 percent of the level in the same period of 2019.Switching gears to financial newsChina's fiscal revenue expanded 5.5 percent last month, mainly because the policy package introduced in September supported economic recovery and boosted business confidence. Tax revenue achieved positive growth for the first time this year in October, up 1.8 percent from a year earlier, data released yesterday by the Ministry of Finance showed.China's holdings of US treasury bonds fell to USD772 billion in September, a drop of USD2.6 billion from a month earlier, marking the third consecutive monthly decline, according to the latest data released by the US Department of the Treasury on Monday.SF Holding plans to raise up to HKD6.2 billion in a Hong Kong listing by issuing 170 million shares priced between HKD32.30 and HKD36.30 a share, according to regulatory filings the Chinese express delivery company released yesterday.Wrapping up with a quick look at the stock marketChinese stocks rose on Tuesday with the benchmark Shanghai Composite gaining 0.7 percent and the Shenzhen Component jumping 1.9 percent. Hong Kong’s Hang Seng index also inched up 0.4 percent and the TECH index added 1.2 percent.