The Boao Forum for Asia and the Hong Kong Monetary Authority Co-organise the Financial Cooperation Conference in Hong Kong Focused on Monetary Policy, Capital Flows, Infrastructure Financing and Financial Cooperation in Asia
Origin:Boao Forum for Asia      Time:2016-06-29 09:25:46     Views:765249

The Boao Forum for Asia (BFA) will co-organise the Financial Co-operation Conference with the Hong Kong Monetary Authority (HKMA) in Hong Kong on 4-5 July 2016.  The Conference will explore in depth monetary policy, capital flows, infrastructure financing and Asia financial co-operation, currently among the major economic and financial concerns.  Mr LEUNG Chun-ying, Chief Executive of the Government of the Hong Kong Special Administrative Region and Mr John C TSANG, Financial Secretary will attend and address the launch ceremony and luncheon respectively.

The theme of the Conference is the role of finance in stimulating growth in the real economy and aims to explore new approaches to achieving this from four different angles, namely monetary policy, capital flows, infrastructure financing and financial cooperation in Asia.

Asia-pacific and regional state leaders, heads of international organisations, financial regulatory officials and global business leaders including Mr Shaukat AZIZ, former Prime Minister of Pakistan; Mr JIN Liqun, President of the Asian Infrastructure Investment Bank; Mr Philippe LE HOUEROU, CEO of the International Finance Corporation; Mr Stephen P. GROFF, Vice President of the Asian Development Bank; Ms WU Xiaoling, Vice Chairperson, Financial and Economic Affairs Committee of the National People’s Congress of China; Mr Norman TL CHAN, Chief Executive of the HKMA; Ms Laura CHA, Chairman of the Financial Services Development Council; and Mr Victor FUNG, Chairman of the Fung Group will attend the Conference.

Participants from the financial sector include Mr HU Xiaolian, Chairman of the Export-Import Bank of China; Mr ZHENG Zhijie, President of the China Development Bank; Mr Mark MACHIN, President and Chief Executive Officer of the Canada Pension Plan Investment Board; Mr CHEN Siqing, President of the Bank of China; Mr Samir ASSAF, Chief Executive of the Global Banking and Markets of the HSBC; Mr Warwick SMITH, Chairman of China of the Australia New Zealand Banking Group Ltd; and Mr David WRIGHT, Vice Chairman of Barclays.

Renowned economists including Mr LI Jiange, Chairman of the Board of Trustees of the Sun Yefang Foundation and Mr Andrew SHENG, Chief Adviser to the China Banking Regulatory Commission will also attend.

Subjects for discussion in the Conference

I. Monetary Easing: What’s Next?

Major economies except the US are turning to increasingly loose monetary policies with some central banks resorting to negative interest rate policies. Despite all these, their economies are still not picking up. “Helicopter money”, once considered inconceivable and only research fodder for academics and economists, has gradually drawn the attention of policy makers.

Is monetary easing losing its power?  Why has ample liquidity failed to give impetus to the real economy?  What has gone wrong?  Is there any lower limit to the easing?

The intensity and wide-ranging coverage of the current thinking and deliberations on monetary policies is unprecedented. Divergent views are also expressed on the respective functions of monetary policies, fiscal policies and structural reforms in achieving growth. Some opine that since the financial crisis, monetary policy has been relied upon excessively as a driver for global growth and should now be allowed to reassume its intended role. To promote growth, much needs to be done rather in structural reforms and fiscal policies.

During the session on “Monetary Policy and Economic Growth” to be held in the morning of 5 July, Mr Shaukat AZIZ, Mr LI Jiange, Ms WU Xiaoling and Mr David WRIGHT will discuss the above issues.

II. Managing Capital Flow: “Homework” Plus Global Action

Amid uncertain global economic prospects, fragile market confidence and excessive or even overflowing liquidity, major capital inflows and outflows are frequently seen and have become the main cause of financial and economic fluctuations in emerging markets.  Capital outflows have for some time been affecting currency, financial and economic stability in the Asian and emerging economies, including China, and even led Brazil and Russia into recession.  Addressing cross-border capital flows effectively has become the focus of policy makers and academia.

Why are emerging markets more vulnerable to capital flows than advanced economies? What do emerging markets have to do in order to enhance their basic resilience against such shocks? Under what circumstances can capital controls and the Tobin tax be considered?

As the US dollar is the world’s major reserve currency, its movements and the US Federal Reserve’s decisions will, to a great extent, dictate the directions of global capital flows. The Fed recognises that its policy has significant implications for the international financial system. During the eighth session of the US-China Strategic and Economic Dialogue held recently, the Fed confirmed that international financial stability will be one of its key policy objectives. This is definitely a positive development.

Meanwhile, G20 as the global platform for dialogue and co-ordination among major advanced and emerging economies plays an irreplaceable role in co-ordinating monetary policies and effort to address volatile capital flows.

The UK voted in a referendum last week to leave the European Union. As the country hosts a major financial centre, the direct and indirect implications of its secession for the global economy, financial markets and capital flows in the short and long runs remain to be seen. Amid the complex and highly uncertain outlook for the global economy, the UK’s move will indeed cast a bigger shadow.

Mr LIU Ming Kang, Ms Laura CHA and Mr Andrew SHENG will discuss measures to deal with capital flows during the session on “Managing Capital Flows” to be held in the morning of the same day.

III. Infrastructure as a Growth Engine

Infrastructure development is crucial to growth in developing countries and helps promote trade between countries and advance regional development. However building the necessary infrastructure requires massive funds, itself a major challenge for developing countries. So, what role can multilateral development agencies and policy banks play to help address the issue? In what ways can the public sector and private funds work together on this?   

Besides, should Asia adopt a regional approach for financing? What are the impediments to investing in infrastructure in Asia and Belt and Road countries?   How will investing in the latter drive economic and trade cooperation and internationalisation of the renminbi?            

At the session on “Infrastructure as a Growth Engine” to be held in the afternoon, several heads of international financial institutions including Mr JIN Liqun, Mr Philippe LE HOUEROU, Mr Stephen P. GROFF, Ms HU Xiaolian and Mr ZHENG Zhijie will share their views on that theme.   

IV. Infrastructure Financing: The Business Perspective

While the huge infrastructure funding needs would bring more investment opportunities, investors typically assess investment projects from a business perspective. First, from a portfolio construction standpoint, what are the incentives for investors to allocate capital to emerging markets or infrastructure projects? How should investors weigh up infrastructure compared to other asset classes?

Infrastructure projects are a long-term investment. So, the question of how to source and identify sustainable long-run infrastructure projects and obtain long-term financing for them is an important one. In deciphering the value chain of infrastructure project financing, investors can seek to balance the risks and return profile from equity and debt’s perspectives.

At the session on “Infrastructure Financing – The Business Perspective” to be held in the afternoon, invited guests including Mr Samir ASSAF, Mr Mark MACHIN, Mr CAI Jinyong, Partner of TPG Capital and former CEO of International Finance Corporation, Mr JU Weimin, Executive Vice President of China Investment Corporation, Mr Richard LANCASTER, CEO of CLP Holdings Ltd, and Mr Ben WAY, CEO of Macquarie Group Asia, will discuss how to consider the financing of infrastructure from a business perspective.

V. Financial Cooperation in Asia: Where are We and What can be Done?

Entering this century, Asia has been staying ahead of the rest of the world in terms of the pace of growth, accounting for two-thirds of global output growth, and an increasingly important driver of global economy to reckon with.  This achievement has been made possible with the remarkable role played by the financial sector.  The continuing development of Asia’s economy and finance, in particular its progress towards regional integration and, hence, the macro-trend of globalisation, increasingly hinge on a deepening in financial cooperation between Asia and the rest of the world.

The growing demand for financial cooperation between Asia and other economies highlights the importance of dialogue and deliberations. On the one hand, discussions need to be made on both the physical and less tangible aspects of Asian financial cooperation. How will Asian financial cooperation enhance the interconnectedness and understanding among the financial industry in the whole region? How will this cooperation help achieve aggregation of financial statistical data in Asia and promote joint effort in the development of a regional harmonised / standardised credit rating system, enhancing infrastructure development and key financial businesses, combating financial crimes and containing financial risk in Asia? On the other hand, existing official and unofficial platforms and mechanisms of financial cooperation in Asia are due for a review.

At the session on “Financial Cooperation in Asia: Where are We and What can be Done?” to be held in the afternoon of 5 July, invited guests including Mr Andrew SHENG, Chief Adviser to the China Banking Regulatory Commission, Mr CHEN Siqing, President of the Bank of China, Mr Peter WONG, Group Managing Director, HSBC Group Deputy Chairman and Chief Executive, The Hong Kong and Shanghai Banking Corporation Ltd., Mr BA Shusong, Chief Economist of China Banking Association Chief China Economist, Hong Kong Exchanges and Clearing Limited, Mr Paul WILKINS, Chairman & CEO, Greater China Region, Marsh, Mr Kenneth W. HITCHNER, President, Goldman Sachs in Asia Pacific Ex-Japan and Mr Masamichi KONO, Special Advisor to the Minister for Financial Services, Former Vice Minister for International Affairs, Financial Services Agency, Japan, will discuss the issues above.

About the Boao Forum for Asia

As one of the foremost business-government dialogue platforms for Asia and emerging economies, the BFA convenes its Annual Conference in Boao, Hainan, China – a four-day brainstorming event focused on the most strategic and pressing issues of Asia and emerging markets, where participants will share their insights and solutions regarding these issues. Committed to promoting the economic integration of Asia, the BFA also holds annual conferences dedicated to the two topics of financial cooperation and energy & resources as part of its effort to facilitate the integration process.

About the Hong Kong Monetary Authority

The HKMA is the government authority in Hong Kong responsible for maintaining monetary and banking stability. The HKMA’s major functions are

 

  1. to maintain currency stability within the framework of the Linked Exchange Rate System
  2. to promote the stability and integrity of the financial system, including the banking system
  3. to help maintain Hong Kong’s status as an international financial centre, including the maintenance and development of Hong Kong’s financial infrastructure
  4. to manage the Exchange Fund.

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