24 June 2019

HKEJ Today: Highlights

Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Wednesday, Dec. 4:


RMB becomes second largest trade finance currency

The renminbi has become the second most-used currency in the world for trade financing, trailing only the US dollar and beating the euro and the Japanese yen, said the Society for Worldwide Interbank Financial Telecommunication (SWIFT). The market share of the Chinese currency in October has risen to 8.66 percent from 1.89 percent in January last year, while that of euro dropped 1.23 percentage point to 6.64 percent and the yen’s share fell 0.58 percentage point to 1.36 percent, according to the Belgium-based financial cooperative. The share of the greenback slid to 81.08 percent from 84.96 percent. Market observers, however, said the Chinese currency still has a long way to go for it to be called an international currency as renminbi-denominated trade settlements are concentrated mostly in Asia at present.

Qin Xiao warns of threats to Hong Kong as offshore RMB center

Interview: The Hong Kong government and the banking industry should expand the renminbi pool in the city to enable it to combat rivalry from other offshore centers for the Chinese currency, such as Singapore and London, said Qin Xiao {秦曉}, the government-appointed Financial Services Development Council Convener for the Mainland Opportunities Committee. Market players and the authorities should also seek more ways to channel back the Chinese currency to mainland China, in a bid to secure sustainable development for the offshore center.


China to hasten land reform next year

China will push ahead with land reform next year amid the nation’s plans to hasten urbanization and development of modern towns, the Communist Party Politburo said in a statement after its first meeting since a top leaders’ plenum in early November. President Xi Jinping {習近平} said at the meeting that the government should put more effort to drive domestic growth while ensuring healthy prospects in the real estate sector and stable supply of affordable homes. The Politburo also pledged a prudent monetary policy and a progressive fiscal policy stance for next year.

Qin Xiao calls for nod to RMB share issues in Hong Kong

Former chairman of the state-backed China Merchant Group, Qin Xiao {秦曉}, said it is worth studying ways to channel back renminbi funds from Hong Kong to the mainland and to allow H-share issuers in the city to sell shares denominated in the Chinese currency. As Chinese authorities have suspended A share issues, new initiatives can help soothe the financing pressure of Chinese firms that are listed in Hong Kong but need renminbi funds to back their business in the mainland, Qin said.

SHK Properties’ Kwok Siu-hing said to have sold shares to co-chairmen

Sun Hung Kai Properties Ltd. (00016.HK) former chairwoman Kwok Kwong Siu-hing is said to have split evenly part of the company shares she owned to two of her sons, Thomas Kwok and Raymond Kwok, currently co-chairmen of the developer. Data at Hong Kong Exchanges and Clearing Ltd. (00388.HK) showed the elderly lady, who still owns 822 million or 30.79 percent shares, has sold 338 million shares the same day the two co-chairmen each increased holding of 169 million shares of the company.


New healthcare financing plan seeks to balance public, private services, Ko says

Interview: Health minister Ko Wing-man said the new voluntary medical insurance scheme is not aimed to bring about an overhaul of Hong Kong’s healthcare system, but provide one of the six tools to ensure better balance between pubic and private healthcare services. He said the public has expressed a clear view in previous consultation that it does not support a compulsory insurance scheme. The next round of consultation on the new scheme is expected to begin early next year.

Ex-Democrat Andrew Fung named Information Coordinator

A former Democratic Party central committee member, Andrew Fung, has been named as the new Information Coordinator of the Hong Kong government, replacing June Teng, who earlier quit because of health reasons. Fung’s appointment was criticized by the pan-democrats as another decision made by Chief Executive Leung Chun-ying that went against the wish of people. Fung, who resigned from the Democratic Party after he applied for the post of deputy minister, was at the center of a spate of controversies. The government also announced that Patrick Nip will become the Director of Information Services.


Biden trip helps to expedite crisis talks between China, Japan over islands

The visit of US Vice President Joe Biden to Japan and China is clearly aimed at mediation over the territorial dispute between the two nations. Talks on the setting up of a crisis management mechanism between the two countries in the wake of rising tensions in East China Sea could provide an opportunity for both sides to sit down and talk. Apart from territorial dispute, China and the US have shared common interest in nuclear threat in North Korea and Iran, energy and internet security issues.


State-owned firms the next target of China’s anti-corruption drive, Yuen says

Mainland media have reported recently that three more senior executives of state-owned firms at both central and provincial levels were held for anti-graft investigation. Veteran China watcher Edgar Yuen said there are growing signs that the nation’s anti-graft body has shifted its attention to corruption in state-run enterprises. The state-run sector, which has not been given adequate supervision by authorities in the past, has emerged as one of the weakest area in the nation’s anti-corruption campaign.

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