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Hong Kong super-connector

Access to financial services

Collaborating along the Belt and Road

Opportunities and challenges

finance chart

The Belt and Road Initiative (BRI or the Initiative) presents a number of opportunities and challenges to consider for local BRI governments, inbound investors and business partners.

Access to financial services

The level of sophistication and reliability of local financial markets, systems and regulatory frameworks vary from country to country along the Belt and Road. The financing of BRI projects is key, and there is a need for a hub to consolidate financing needs and investor activity. As an international finance centre and global super-connector of trade and investment, Hong Kong holds a significant advantage.

Key financial services themes

Asset management

The range of investable BRI opportunities is expected to create high volumes of asset management opportunities for existing and new fund managers. This will generate fundraising opportunities for private equity, venture capital and other specialist capital investment groups, as well as knock-on business for asset management service companies such as trust companies, legal advisors and investment consultants. Hong Kong has also introduced a range of measures that promote the city as an asset management hub and complement its role in raising capital.

Foreign exchange (FX) risks

Perceived levels of FX volatility, convertibility and access to flexible and cost effective FX risk management instruments are key considerations for foreign investors in deciding whether to enter new BRI markets. In particular, we expect RMB funding to play an important role in BRI activity, with Hong Kong well-positioned as a leading centre for global offshore RMB.

Legal systems and enforceability

Governments that allow foreign investment agreements to be governed by the laws of internationally renowned contractual legal jurisdictions, such as Hong Kong, will be considered appealing for international BRI investors. Countries with established legal systems that demonstrate adherence to the rule of law and a history of equitable treatment of foreign investors will also be considered investable jurisdictions.

Finance

The government has emphasised Hong Kong’s role as the financing centre for the BRI. The BRI is therefore expected to lead to more financing demand, including for leasing and green finance.

Insurance and risk management

Entering new markets along the Belt and Road will require robust risk management processes and effective insurance coverage. Hong Kong’s mature market is well-placed to provide direct insurance, insurance brokerage services and reinsurance coverage to mainland enterprises on their BRI projects. Groups that are able to identify their genuine risk exposures and implement insurance and risk mitigation strategies will dramatically increase their chances of BRI success.

The KPMG financial services proposition

Established footprint

KPMG has an established footprint in Hong Kong since the opening of its office in 1945, and has a long history of working with some of the largest local and global banks and financial institutions.

Financial strategy

Our dedicated specialists leverage their in-depth cross-border investment, syndicated lending and legal market knowledge to provide comprehensive and tailored solutions throughout the entire investment cycle.

Data analytics

By leveraging big data and data analytics solutions, our professionals provide detailed insights to enable local, regional and international clients to create suitable businesses strategies along the Belt and Road.

Contact us

Bonn Liu

Head of Financial Services, Hong Kong;
Head of Investment Management, Asia Pacific
KPMG China
+852 2826 7241
bonn.liu@kpmg.com

Simon Donowho

Head of Insurance
KPMG China
+852 2826 7105
simon.donowho@kpmg.com

Paul McSheaffrey

Head of Banking & Capital Markets, Hong Kong
KPMG China
+852 2978 8236
paul.mcsheaffrey@kpmg.com

Vivian Chui

Head of Securities and Asset Management, Hong Kong
KPMG China
+852 2978 8128
vivian.chui@kpmg.com

Terence Fong

Partner, Financial Services
KPMG China
+852 2978 8953
terence.fong@kpmg.com

 

 

Collaborating along the Belt and Road:
Leveraging Hong Kong as a super-connector to the region and beyond

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