Following is the speech by the Financial Secretary, Mr John C Tsang, at the opening reception of National Bank of Abu Dhabi Hong Kong Branch today (December 3):
Mr Tomalin your excellencies, Distinguished Guests, Ladies and Gentlemen,
It is my great pleasure to join you all this evening.My warmest congratulations to National Bank of Abu Dhabi on opening its first branch in Hong Kong.We are delighted to have you here.
Hong Kongs relations with the Middle East in general and the UAE in particular have deepened in recent years through various high-level exchanges and the development of Islamic finance in Hong Kong.
National Bank of Abu Dhabi (NBAD) is the first full-licensed bank from the UAE to open a branch here, marking another step towards even closer ties between us.
At the same time, your presence reinforces our status as a truly global financial centre in the Asian time zone.
As an important pillar of Hong Kongs economy, financial services contribute nearly one fifth of our GDP.We also serve as our nations global financial centre with a free flow of capital and information and a deep pool of local and international financial talent.
NBAD joins banks from around the world, including about 70 of the worlds largest 100 banks that already have a presence in Hong Kong.We are a stable and vibrant city with an independent judiciary underpinning our common law legal system.We have a low and simple tax system, a highly transparent regulatory regime and well-capitalised markets.These are some of the reasons that Hong Kong has been rated as the worlds freest economy for each of the past 15 years by the Heritage Foundation in the US.
Hong Kong and the Middle East have a long trading relationship, and the UAE is by far our largest export market in the region.In the first nine months of this year, the volume of trade between Hong Kong and the UAE topped HK$23 billion [US$2.9 billion].NBAD will be able to facilitate its clients trade and investment transactions, as well as to foster business growth in Asia, particularly in the mainland of China.
Our financial system is closely intertwined with that of the Mainland.Banks here are able to offer a wide range of services in the Mainland currency.These include Renminbi deposits, currency exchange, remittances, credit cards and personal cheques as well as services related to Renminbi bonds.
Over the summer, our banks became the first ones outside the Mainland to issue Renminbi bonds.And in September this year, the Central Government in Beijing issued the first batch of sovereign bonds here, which were extremely popular with investors.
Our banks have also launched trade settlement transactions using the Renminbi.This cross-boundary trade settlement scheme highlights the growing importance of the Renminbi as an international currency.It is also a major step for Hong Kong in becoming the only offshore centre for Renminbi.
These are some of the ways we can connect our nation with markets overseas and provide scope for our banks to diversify their services.
Another exciting prospect is the development of Hong Kong as a platform for Islamic finance. We aim to position our city as a gateway for investors in our region and our nation to access Shariah-compliant products.
The response to Islamic financial products in our city has so far been encouraging.We have launched Islamic bonds or sukuks, as well as Islamic funds, Islamic indices and Islamic banking windows.
My colleagues in Government are currently working on legal amendments to relevant tax laws to provide a level playing field for Islamic financial products vis-ˆj-vis conventional products.
We welcome NBADs expertise in this field as we develop our market for Islamic finance.
I also assure you that our inward investment agency, Invest Hong Kong will continue to lend its expertise to you as you settle into Hong Kong.
Ladies and Gentlemen, it only remains for me to wish the National Bank of Abu Dhabi a successful and prosperous future in Hong Kong.
Thank you very much.