This photo taken on Feb 1, 2025 shows a city view of Hong Kong. (Photo: Xinhua)
Shanghai and Hong Kong signed an action plan on Wednesday aimed at promoting the coordinated development of the two international financial hubs, ramping up market connectivity, exploring new areas of collaboration, in a bid to enhancing the resilience of both cities amid growing global challenges, Shanghai Observer reported.
The agreement was signed on the same day as the opening of the 2025 Lujiazui Forum, an annual event held in Shanghai since 2008. According to a South China Morning Post report on Wednesday, the event marks the most significant cooperation between the two cities since the launch of the Stock Connect scheme in 2014.
The action plan maps out concrete cooperation priorities between the two financial hubs, including boosting market connectivity, enhancing cross-border financial innovation, as well as advancing green finance and fintech partnerships, moves that will inject new and richer substance into their multi-level, multi-faceted financial cooperation, per the plan.
In his speech at the signing ceremony, Paul Chan Mo-po, financial secretary of the Hong Kong Special Administrative Region (HKSAR) government noted that the action plan serves China's national strategy of building a strong financial nation, "carrying significant importance," according to a release from the SAR's government website.
Amid various external risks and challenges, deepening financial collaboration between Shanghai and Hong Kong is both a strategic move to implement China's financial strength goals and a long-term measure to enhance the resilience of the two financial centers, according to the Shanghai Observer report.
The action plan focuses on six key areas, such as advancing infrastructure connectivity, jointly building financial product and service systems, and leveraging strategic complementarity between the two hubs' offshore finance sectors. It also outlined a total of 38 measures.
Highlights of the plan include further optimizing mechanisms such as Bond Connect program and Swap Connect, providing high-quality cross-border and offshore financial services to support enterprises in going global and the high-quality Belt and Road cooperation, and accelerating efforts to establish both cities as global hubs for yuan assets management.
The plan also identifies new areas for collaboration, including cross-border clearing, connectivity in gold products and trading, new application scenarios for cross-border e-CNY (digital yuan) payments, and the expansion of reinsurance business by Shanghai-based financial institutions through Hong Kong, per the plan.
Also, the two cities will jointly promote innovation in financial services, strengthen coordination in fintech, green finance, and digital finance, and enhance financial support for major strategic initiatives, key sectors, and weak links, in order to further improve the financial sector's ability to serve the real economy.
Under the action plan, the two sides will collaborate to expand the application of AI and blockchain technologies in asset management, insurance, and settlement scenarios.
They will leverage financial policies to support innovation-driven enterprises, such as encouraging insurers to cover new drugs and medical devices from both markets to boost the development of biopharmaceutical industry.
With Shanghai rapidly emerging as a global hub for technological innovation, and Hong Kong working with the Greater Bay Area cities to establish itself as a comprehensive international innovation and technology center, enhanced collaboration between these regions will direct greater financial resources to fuel growth in these key sectors, Chan noted.
On institutional progress, regular exchanges between financial regulators will be held to foster closer cooperation in information sharing, standards alignment, and talent mobility, jointly creating a market-oriented, law-based, and internationalized financial business environment.
Coming next, Shanghai and Hong Kong will drive complementary development and mutual empowerment between the two international financial centers, jointly elevating China's influence and voice in the global financial system, per the action plan.
