HK should grow into a full-fledged financial market: HKEx

Hong Kong should grow into a full- fledged financial market and become the global financial center of Asia, Hong Kong Exchanges and Clearing Limited (HKEx) Chief Executive Charles Li said Tuesday.

Speaking at the Seventh Asian Financial Forum, Li said that in the last 30 years, China's reform has been made mainly through three events -- trade, which brought China the first bucket of gold, foreign direct investment, which has engaged China with the world market, and capital market formation. Hong Kong has becomes the offshore capital center of the Chinese mainland, and essentially has helped it grow into an important destination for world's largest banks, insurance companies and other financial institutions.

"All three events present one thing in common that is capital moving into China. But today China has too much capital, not too low. The capital is coming out. I challenge Hong Kong is not ready for that," Li said.

Li noted that Hong Kong is not ready to be recipient of capital from the Chinese mainland for the reason that it only has the equity market, while as a destination of the Chinese mainland's capital, Hong Kong also needs to establish centers to tackle fixed income, currency, commodity and so on to join the ranks of true global financial centers such as those in Chicago, New York and London.

"So we bought LME (London Metal Exchange). It's a key step for us to get there," Li said.

Themed "Asia: Powering World Growth," this year's Asian Financial Forum focuses on Asia's fast-expanding role in the global economy. More than 2,400 business leaders and senior government officials from around the world shared their insights on major Asian economic issues at the forum, which opened here Monday and continues through Tuesday.

"Hong Kong has been resilient after the 2008 global financial crisis, and it continues to be among the top IPO fund raising platform," Laura Cha, chairman of Hong Kong's Financial Services Development Council said.

Besides the advantages, under the circumstance of fierce global competition, Cha warned that Hong Kong also needs to stay alert and keep moving.

Cha said that Hong Kong needs to develop additional financial- services capabilities and absorb more talents to retain its competitive edge.