25th April 2025 – (Hong Kong) Hong Kong Monetary Authority Deputy Chief Executive Darryl Chan Wai-man highlighted the city’s financial resilience amid recent asset market volatility caused by tariff impositions and shifts in the global trade environment. He emphasised that Hong Kong’s financial system continues to function as a vital link between the Chinese mainland and international markets.
Chan pointed out that Hong Kong’s $400-billion foreign exchange reserves provide robust support for the currency peg system and overall financial stability. He noted that deposits in the city’s banking system increased by 7.1% last year, reflecting strong demand for the Hong Kong dollar in both the real economy and capital markets. Additionally, Hong Kong’s banking system outperforms international benchmarks in capital adequacy and liquidity coverage.
The global market turmoil intensified following tariff announcements by US President Donald Trump on April 2, leading to significant selloffs of risky assets. Amid these uncertainties, Chan reaffirmed the HKMA’s pledge to maintain financial market stability and support the real economy. Meetings with representatives from trade, import-export, and transportation sectors were held to address the challenges faced by small and medium-sized enterprises (SMEs). Chan stressed the importance of banks providing targeted financial assistance to SMEs, which remain critical to Hong Kong’s employment landscape.
Hong Kong’s strategic role as a financial hub has also facilitated the global expansion of Chinese mainland enterprises. By the end of last year, over 2,600 mainland companies had established operations in Hong Kong, including more than 730 regional headquarters and offices. Many state-owned and private mainland enterprises have set up treasury centres in Hong Kong, centralizing operations to enhance capital management efficiency and security.
Chan emphasized Hong Kong’s significance in the offshore renminbi market, noting that 75% of global offshore renminbi payment transactions are processed through the city. The outstanding amount of renminbi-denominated bond issuances has surged by 40% over the past two years, while renminbi bank loans have nearly tripled. Hong Kong remains the largest foreign exchange market for renminbi transactions and the fourth-largest foreign exchange market globally.
He highlighted the increasing demand for renminbi in offshore markets, driven by cross-border trade and financing activities. Mainland enterprises are leveraging Hong Kong’s financial platform to support their overseas expansion, creating new opportunities for the city’s financial industry.
Chan also noted the presence of 29 systemically important banks and more than 70 of the world’s top 100 banks in Hong Kong, with some establishing Asia-Pacific headquarters in the city. This reflects Hong Kong’s critical position in the global financial landscape.
Amid the ongoing trade and tariff tensions, the HKMA is committed to helping enterprises adapt to changes, strengthen their innovation capabilities, and expand their international networks. Chan reiterated that the HKMA will work closely with the banking sector to ensure continued financial stability and to assist businesses in navigating the evolving economic landscape.
