China's central government unveils supportive measures for Hong Kong's financial development

China's central government Wednesday unveiled a slew of favorable policies to support Hong Kong's standing as an international financial center and the city's development of RMB business. Specific measures include the launch of the exchange-traded fund constituted by Hong Kong stocks, encouraging more mainland-based enterprises to get listed in Hong Kong, allowing Hong Kong-invested banks on the mainland to engage in mutual fund business, according to a statement released by a delegation led by Chinese Vice Premier Li Keqiang, who started his three-day visit to Hong Kong from Tuesday. Hong Kong banks and insurance companies will also be allowed to play a bigger role in the mainland. Hong Kong banks will be encouraged to step up efforts to establish more branches in Guangdong Province. Insurance products development and business operation cooperation between insurance companies of both the mainland and Hong Kong will also be encouraged, according to the statement. To boost Hong Kong's status of the RMB settlement center, the central government will extend the cross-border trade settlement in RMB to cover the whole country. Pilot projects for foreign banks to replenish capital with RMB will be launched and support will be given to Hong Kong enterprises in making direct investment on the mainland in RMB, the statement said. According to the statement, the amount of RMB bonds issued by mainland institutions in Hong Kong will also be steadily raised. The mainland's enterprises will be allowed to float RMB bonds in Hong Kong. Hong Kong will also be encouraged to innovate the offshore RMB financial products, the statement said. The RMB Qualified Foreign Institutional Investors (RQFIIs) will be allowed to invest in mainland securities markets with an initial size of 20 billion RMB yuan, visiting Chinese Vice Premier Li Keqiang pledged at a forum which were attended by business professionals, experts and government officials.