Full text of "The Chief Executive's 2026 Policy Address" (2)

On 16 Sep 2026, the Information Services Department published Chapter III of *The Chief Executive's 2026 Policy Address*, entitled 'Strengthen the Four Centres and Develop the Hub for High-calibre Talent'. The chapter is organised into two principal divisions: ("A") International Financial Centre, addressing among other matters the global offshore RMB business hub, fixed income markets, digital bonds, securities market enhancements, asset and wealth management, risk management including reinsurance and specialty insurance, commodity trading ecosystems encompassing gold and broader metal networks, green and sustainable finance, fintech innovation, and co-ordination of emerging financial risks; and ("B") International Maritime Centre and Aviation Hub.

Global Offshore RMB Business Hub

In 2025, offshore RMB lending in Hong Kong attained a record high of RMB 935 billion, while bond issuance reached the milestone of RMB 1 trillion for two consecutive years. The Government has committed to sustaining momentum through a series of measures grouped under four thematic pillars.

Under 'Enhance Liquidity', the *RMB Business Facility*—introduced in the preceding year and providing banks with stable, lower-cost access to RMB funds—has been expanded to RMB 500 billion, with loan tenor extended up to three years. The HKMA is concurrently exploring enhancements to the Currency Swap Agreement with the People's Bank of China to fortify offshore RMB market liquidity. In addition, the HKMA will introduce a tendering mechanism for seven-day offshore RMB liquidity and explore issuance of offshore RMB short-term debt instruments in order to support construction of an offshore RMB yield curve.

Under 'Expand the Dim Sum Bond Market', measures include broadening dim sum bond issuance with enhanced tenor structures; seeking Ministry of Finance support for increased scale and frequency of issuance in Hong Kong; encouraging policy financial institutions to issue bonds locally; and, through HKEX, launching the *HKEX Offshore RMB Bond Index* as a market reference indicator and underlying index for exchange-traded funds.

Under 'Diversified Products', the HKMA will explore expanding Southbound Bond Connect product scope to encompass Hong Kong Dollar-denominated bonds and additional RMB bond categories as eligible underlying assets. The SFC is preparing inclusion of RMB counters under Southbound Trading via Stock Connect, while HKEX will encourage listed companies to establish RMB trading counters.

Under 'Diversify Risk Management Tools and Asset Uses', following the official launch of China Government Bond Futures, the SFC will support HKEX in enriching its suite of RMB foreign exchange futures products. The scope for acceptance of Northbound Bond Connect bonds as collateral is being expanded to three clearing houses under HKEX's purview; a bond repurchase business utilising Southbound Bond Connect bonds as collateral is also under active development.

Under 'Deepen External Collaboration and Promotion', the HKMA, the People's Bank of China, and Bank Indonesia are expected to initiate the bilateral currency transaction framework between offshore RMB and Indonesian Rupiah during this year; the HKMA will further explore direct exchange arrangements for additional currencies. The HKMA will encourage greater participation by foreign banks in Hong Kong as direct members of CIPS, deepen collaboration with central banks across ASEAN and Middle Eastern jurisdictions, forge closer ties with Central Asian and Latin American counterparts, and undertake a visit to Indonesia accompanied by representatives of the Hong Kong Association of Banks.

Fixed Income Markets

Hong Kong remains the pre-eminent hub for arranging international bonds issued by Asia-based entities, accounting for approximately one-quarter of global total issuance arranged in 2025. To consolidate this position: (i) the SFC will refine its regulatory framework to align with internationally recognised standards; (ii) *Bond Connect Company Limited*—a joint venture established between the China Foreign Exchange Trade System and HKEX—is developing an electronic fixed income and currency trading platform, initially supporting bond transactions before progressive expansion into money market and foreign exchange trading; and (iii) the SFC will encourage HKEX to incorporate a new reference rate under Swap Connect in Q4 2026. The *FDR007*—representing the seven-day fixing repo rate between Mainland banks—reflects interbank financing costs and assists global investors in managing RMB interest-rate exposure; HKEX is also exploring introduction of a central clearing mechanism for bond repurchase transactions.

Digital Bonds

Between 2025 and H1 2026, digital bonds issued in Hong Kong captured close to fifty per cent of the global market share. The Government's measures include: (i) regularisation of digital bond issuance frameworks to drive innovation, including utilisation of digital currencies for settlement purposes; (ii) HKMA will conduct testing on tokenisation of Exchange Fund Bills by year-end to facilitate efficient round-the-clock deployment of in excess of $1.3 trillion worth of such instruments; (iii) the *Tokenised Bond Expert Group*, convened under the auspices of the HKMA, will commence its second-phase legal review in collaboration with FSTB to advance distributed ledger technology application across capital markets; and (iv) CMU OmniClear Limited is establishing a dedicated digital asset platform during this year providing integrated one-stop services for both issuance and settlement of digital bonds.

Enhancement of the Securities Market

As at end August 2026, aggregate funds raised through initial public offerings in Hong Kong have exceeded $340 billion, surpassing last year's cumulative total. The Government has outlined a comprehensive programme: (i) the SFC will initiate consultation on streamlining prospectus disclosure requirements commencing in 2027; (ii) promotion of dual primary and secondary listing pathways for overseas enterprises—including those from Southeast Asia and Belt and Road jurisdictions—with advancement of Kazakhstan's qualifying exchanges onto the recognised stock exchange list; (iii) a second-stage public consultation on enhancing competitiveness of the listing mechanism, addressing notifiable transactions, connected party transactions, and spin-off arrangements, is scheduled to commence in Q3 2026; (iv) given that technology stocks now account for over forty per cent of overall market liquidity, HKEX will launch a consultation in H1 next year on amendments to specialist technology listing rules, including review of the prevailing market capitalisation threshold.

In respect of settlement infrastructure, HKEX is undertaking preparatory work toward introduction of a 'T+1' cash-market settlement cycle upon co-ordination with relevant Mainland authorities. The *T+1 settlement cycle*—a mechanism whereby trades settle on the trading day plus one business day—is being developed in collaboration with the HKMA for implementation alongside a wholesale central bank digital currency (e-HKD payment solution) to support after-hours derivatives transactions, with real-value pilot operations targeted within this year.

Regarding cross-product and cross-market integration, *CMU*—the Central Moneymarkets Unit operated by CMU OmniClear—is launching global securities services on a phased basis while strengthening connectivity with markets in Europe and the Americas, the Middle East, Central Asia, and ASEAN. The HKMA and HKEX will promote mutual access arrangements between CMU OmniClear and DNS to explore establishment of a unified asset management framework spanning both fixed income and equity instruments.

In relation to the multi-tiered derivatives architecture: (i) HKEX is supporting development of thematic indices, broadening bond index diversity, exploring commodity-based indices, and launching additional index-linked ETFs; and (ii) the Derivatives Market Consultative Panel will examine feasibility of introducing short-dated stock options and thematic futures or contracts for difference. The SFC will further encourage HKEX to enhance margin arrangements across its clearing houses, expand categories of eligible non-cash collateral, and reduce associated fees.

International Asset and Wealth Management Centre

Hong Kong has been recognised as the world's largest cross-boundary wealth management centre in 2026. Following passage of a bill establishing preferential tax regimes for funds, single-family offices, and carried interest arrangements, promotional efforts are being stepped up accordingly. Legislative measures include: (i) introduction during this year of a bill to facilitate privatisation or restructuring of REITs, together with a further bill in H1 2027 providing stamp-duty exemption on transfer of non-residential properties into listing-seeking REIT vehicles; and (ii) the SFC will streamline procedural requirements for dual-listing by quality overseas REITs and revise applicable codes during Q4 2026 to promote fund product innovation.

To attract diverse sources of capital: promotion of Mainland insurance funds' investment in Hong Kong ETFs is being advanced through mutual market access arrangements, with expansion of eligible ETF product scope; cross-listing on HKEX and Southeast Asian exchanges is encouraged. In addition, the total investment limit applicable to MPF funds investing in eligible index-tracking ETFs will be lifted.

International Risk Management Centre

The IA is actively developing both reinsurance and captive insurance businesses within Hong Kong's jurisdiction. Three additional captive insurers have been authorised during this year, bringing the cumulative number of licensed captives to nine. Measures include continued promotion of *ILS* (Insurance-Linked Securities) to narrow the prevailing protection gap for catastrophe risk; exploration of legislative amendments introducing a *PCC structure*—a Protected Cell Company framework designed to reduce establishment costs and facilitate ILS issuance by captive insurers.

In respect of specialty insurance, the Government together with the IA will increase underwriting appetite across sectors including gold storage, commodity trading, and green-fuel bunkering operations.

Commodity Trading Ecosystem – Gold

The following measures have been announced to strengthen Hong Kong's position in gold trading: (i) official launch of a central clearing and settlement system for gold is scheduled for Q1 2027; (ii) HKEX will announce detailed terms of new RMB-denominated, physically settled gold futures contracts during this year; (iii) the MPF Schemes Authority optimised its approval mechanism for gold ETFs in July 2026, enhancing flexibility for MPF funds allocating to such products.

Further measures include: (iv) the SFC will enhance its regulatory regime governing over-the-counter derivatives to facilitate risk and capital management within gold and commodity trading activities; (v) the IA has established a dedicated specie insurance hotline for industry participants; (vi) the HKMA is exploring increasing Exchange Fund holdings of gold, participating in spot and futures markets, and considering transfer of physical gold into designated vaults appointed by Hong Kong Precious Metals Central Clearing Company Limited.

The Government will establish a Gold Hotline providing one-stop regulatory support to Mainland and overseas traders; encourage formation of an industry association for the gold sector; host a flagship industry event in 2027; and collaborate with FSDC on development of gold trading-related professional courses.

International Metal Trading Network

Since LME incorporated Hong Kong into its global warehousing network in 2025, designated storage capacity has exceeded sixty thousand square metres with inventory surpassing twenty thousand tonnes. Measures include: (i) implementation of a half-rate tax concession for physical commodity trading operations; exploration of an additional proposal to extend tax concessions across qualifying activities within the gold and broader commodity ecosystem, subject to LegCo consultation next year.

Additional initiatives comprise: (ii) facilitation of establishment of further LME-approved warehouses in the Northern Metropolis region; (iii) HKEX plans launch of the LME Steel HRC Shanghai contract on its platform in October 2026; (iv) a pilot project for tokenised warehouse-receipt financing with designated banks is targeted for 2027, leveraging physical tracking technologies.

HKEX is establishing a blockchain-backed multi-asset tokenisation platform. Carbon credits are already listed on *Core Climate*—a voluntary carbon credit trading platform launched by HKEX in October 2022 specialising in trading, custody, and settlement of quality voluntary carbon credit products—and commodity warehouse receipts from LME-approved warehouses will be incorporated for a pilot programme next year. C&ED is exploring facilitation measures for customs clearance of commodities; IOMed is being encouraged to constitute a dedicated panel of mediators specialised in commodity trade disputes. The Government will also establish a Joint Working Group on Commodity Trading, co-chaired by the Secretary for Financial Services and the Treasury.

Green and Sustainable Finance

In 2025, green and sustainable bond issuances arranged through Hong Kong accounted for approximately forty per cent of Asia's total issuance volume. During this year (2026), the Ministry of Finance conducted its inaugural RMB sovereign green bonds offering in Hong Kong. The Government has set out a multi-pronged programme: (i) achieving full adoption of *ISSB Standards*—the International Sustainability Disclosure Standards—by large publicly accountable entities by 2028; (ii) HKEX is introducing a 'Green Equity Designation Scheme', while the HKMA will explore new application scenarios under the Hong Kong Taxonomy for Sustainable Finance.

Furthermore: (iii) Core Climate and the Hong Kong Quality Assurance Agency are exploring cross-boundary carbon trading participation to support development of a carbon market with enhanced international influence; and (iv) the HKMA will continue organising the annual Hong Kong Green Week as a platform for industry engagement on sustainable finance matters.

Fintech Innovation and Digital Currency Infrastructure

The SFC is enhancing virtual-asset licensing regimes, improving the regulatory framework governing tokenised investment products—including gold and real-world assets—on licensed platforms, and promoting regulated stablecoin trading alongside their utilisation in settlement of tokenised money market funds. In respect of *CBDC* (Central Bank Digital Currency), the HKMA plans to implement CBDC-based settlement with twenty-four-seven operational capability under EnsembleTX by approximately end-2026, while continuing exploration of additional use cases for tokenised deposits.

Co-ordination of Emerging Financial Risks

The Government will explore enhancement of its legal framework governing detection and removal of fraudulent content, including AI-generated misuse. A public consultation on the proposed legislative framework is to be launched by year-end. The HKMA is considering deployment of artificial intelligence analytics for payment data monitoring; first-phase testing of 'iAM Smart' Step-up Authentication for remote account opening has commenced.

The HKMA has also launched the *Quantum Preparedness Index*—a guidance tool assisting industry participants in upgrading cryptographic infrastructure against future quantum computing threats. The SFC will commence operation of a digital asset custody surveillance system during H2 2026, and activate the big data market surveillance and anti-money laundering components under the CrypTech initiative in 2027. FSTB is consulting the public this year on a legislative proposal to enhance beneficial ownership transparency for both companies and express trusts.

International Maritime Centre

As China's sole international maritime centre operating as a separate customs territory, Hong Kong has maintained its position at fourth globally in comprehensive maritime strength for seven consecutive years. The overarching strategy drives transformation from volume-oriented operations toward value-added services, with the objective of establishing Hong Kong as a 'Global Maritime Capital'.

Green Fuel Bunkering and Trading Centre

The first *Green Energy Corridor*—a corridor connecting Mainland cities to supply green maritime fuel for bunkering or trading in Hong Kong—is expected to be announced later this year, with plans subsequently developed to expand into an integrated network. A planning application regarding green maritime fuel-storage facilities at Tsing Yi South is anticipated next year, with tenders scheduled for early 2028. The Government will support industry preliminary studies on establishment of a dedicated green maritime fuel-trading platform and collaborate with local universities in developing a carbon emission calculation framework.

The Government has introduced an amendment bill into LegCo enhancing tax concession regimes applicable to maritime services and introducing the half-rate tax concession for physical commodity trading operations. Hong Kong's ship registration system is being revamped through introduction of a *dual registration arrangement*—permitting suspension of original owner registration while undertaking demise charter registration at another recognised registry.

Finance, Insurance, and Arbitration Ecosystem

Building upon established maritime finance, insurance, and arbitration practices under common law, the integrated ecosystem promotes adoption by Hong Kong-invested enterprises of: application of HK governing law; placement of marine insurance with licensed local insurers; and selection of arbitration seated in Hong Kong. The IA will drive expansion of underwriting capacity within the marine specialty risk pool. With support from the China Shipowners Mutual Assurance Association and Government assistance, the *Hong Kong Shipowners Mutual Assurance Association*—a mutual assurance body serving shipowner interests—is to conduct international business operations based in Hong Kong.

Green and Smart Port Development

A roadmap for smart transition and green transformation of Kwai Tsing Container Terminals is being formulated, encompassing deployment of autonomous electric vehicles, remotely-controlled crane systems, onshore power-supply facilities (accompanied by port dues incentives), with the first green shipping corridor incorporating a trading green port to be announced during this year. The *Port Community System*—a digital platform utilising trusted cargo-flow data for trade facilitation—has attracted over eight thousand registered enterprises since its 2026 rollout, yielding more than twenty successful applications securing trade finance facilities.

Further measures include: development of offshore trade-cargo tracking leveraging blockchain technology; launch of the Port Community System Enabler Recognition Scheme; and provision of funding through the Future Innovative Logistics Acceleration Scheme to support SME participation in logistics innovation.

Intermodal Transport and Partner Ports

Scheduled freight train services on Chongqing–Shenzhen–Hong Kong and Chengdu–Shenzhen–Hong Kong corridors, combined with Shenzhen Hong Kong Connect feeder operations, have reduced cargo transportation time between the Chengdu-Chongqing region and Hong Kong from two to four weeks down to approximately three days. A container terminal operator has launched a Chongqing-Qinzhou-Hong Kong sea-rail intermodal service supported by daily liner sailings.

The Government will explore inter-provincial land freight transport arrangements, direct river-sea intermodal modes of operation, and study application scenarios for autonomous vessels utilising 'water-to-water transhipment'. A second batch of partner ports is to be announced; additional shipping routes from Central and South America are being channelled through the HK Port. Promotion of a formalised 'brother port' relationship with Shanghai will proceed during this year (2026).

Maritime Talent, Logistics Development, and ESG

A maritime academy is being promoted to train high-calibre professionals under an institution-enterprise collaboration model, incorporating cross-disciplinary career-progression pathways and expanded co-operation with international maritime organisations. A feasibility study on development of a 'business and trading zone for re-export' commences this year; preparation is underway for updating the Roadmap for ESG Development in the Logistics Industry. Expressions of interest are being invited for the Hung Shui Kiu/Ha Tsuen modern logistics cluster, targeting release of the first batch of land parcels from end-2027 at earliest.

International Aviation Hub

In 2025, Hong Kong's passenger throughput recorded a fifteen per cent year-on-year increase to sixty-one million passengers across flights serving over two hundred and twenty destinations. Air cargo throughput reached five point zero seven million tonnes, sustaining HK airport's position as the world's busiest airfreight hub for the fifteenth consecutive year since 2010. Passenger departure facilities at Terminal 2 have commenced operations; commissioning of the full Terminal 2 Concourse is scheduled before end-2027.

Aviation Network Expansion

Since last year, the Government has updated or expanded bilateral air-services arrangements with Mainland China, Israel, Malta, Turkey, Kazakhstan, Luxembourg, Vietnam, Qatar, Indonesia, Thailand, Brazil, and Azerbaijan; or entered into entirely new agreements with Chile, Peru, Poland, Togo, Argentina, Ecuador, Cuba, and Uzbekistan—twenty aviation partners in total. The Government will continue diplomatic engagement across South America, Africa, Central Asia, the Middle East, and the Caucasus region to secure additional bilateral arrangements.

As at end August 2026, AAHK reports that forty airlines have launched ninety-four new routes spanning regions in Asia, Europe, North America, and Africa; flight frequencies on fifteen existing routes have been increased. In respect of the New Aviation Ecosystem: production capacity for high-end aircraft components is being expanded alongside parts processing and storage facilities, maintenance support services, and leasing or sale operations for complete aircraft and spare parts. International collaboration in aircraft dismantling and recycling programmes is advancing to develop a globally competitive aviation industry chain.

Sustainable Aviation Fuel

The Government has spearheaded establishment of Hong Kong's world-leading SAF production base at Dongguan, with commercial production targeted by 2030. Planning proceedings are underway for the first dedicated SAF blending facility within Hong Kong; concurrent studies are examining introduction of a mandatory consumption-ratio mechanism and a green energy certification system to strengthen the value chain and ensure long-term supply of competitively priced sustainable aviation fuel.