Yu Weiwen: Hong Kong is expected to become the world's largest wealth management center in the coming years.

Hong Kong Monetary Authority Chief Executive Eddie Yue wrote in "Exchange" that the Hong Kong asset and wealth management market has shown impressive performance over the past year. According to the recently released "2024 Asset and Wealth Management Activities Survey" by the Securities and Futures Commission, as of the end of 2024, the total value of assets under management in Hong Kong increased by 13% year-on-year, reaching HK$35 trillion. Private banking and private wealth management services stood out, with a 15% year-on-year increase in total assets under management and a net capital inflow of HK$384 billion, reflecting the demand from high-net-worth investors for wealth management services in Hong Kong. Confidence in the future of the Hong Kong asset and wealth management market is high, driven by the accumulation of wealth in mainland China as well as the expansion and optimization arrangements of various connect programs, which will further broaden the client base of the wealth management industry in Hong Kong. The uncertainties in the macro environment have also prompted international investors to actively seek diversified investment strategies to mitigate risks, especially with the increasing allocation of Chinese and Renminbi assets. Capital flows have fully supported this: according to EPFR data, from April to late July 2025, investment funds netted approximately $91.5 billion into Asian markets, with around $44.3 billion of net funds flowing into the Chinese market. Eddie Yue continued to express his expectation that Hong Kong will become the world's largest wealth management center in the coming years. The Hong Kong Monetary Authority will continue to work closely with the government, industry, and the international community to promote policy innovation and market optimization, further enhancing Hong Kong's competitiveness and solidifying its leading position as an international hub for wealth management and asset allocation. Hong Kong Asset and Wealth Management Market: Opportunities and Prospects The Hong Kong asset and wealth management market has shown impressive performance over the past year. According to the recently released "2024 Asset and Wealth Management Activities Survey" by the Securities and Futures Commission, as of the end of 2024, the total value of assets under management in Hong Kong increased by 13% year-on-year, reaching HK$35 trillion. Private banking and private wealth management services stood out, with a 15% year-on-year increase in total assets under management and a net capital inflow of HK$384 billion, reflecting the demand from high-net-worth investors for wealth management services in Hong Kong. Based on market information and communication with industry players, we have also observed that international financial institutions are actively expanding their business presence in Hong Kong. The number of bank institutions engaged in private banking or private wealth management business has been increasing in recent years, with a total of 46 last year. Several major private banks increased their staff in private banking or private wealth management by nearly 400 in the past two years, representing a growth of almost 12%. These institutions also recorded a 14% increase in total assets under management in the first half of 2025 compared to the end of 2024. Some private banks have expanded their office spaces in sync, with increases in area ranging from 35% to over 50%. Recently, several international banks and asset management companies have announced further expansion plans in Hong Kong, with an expected increase in staff of 10% to double over the next few years, demonstrating confidence and attention from international financial institutions in the long-term development of the asset and wealth management market in Hong Kong. We believe that the vibrant development of the Hong Kong asset and wealth management market is driven by the continuous growth of wealth in the Asia-Pacific region, which brings significant demand. Reports indicate that the Asia-Pacific region is one of the fastest-growing regions in terms of private wealth growth globally. In terms of individuals with a net worth exceeding USD 10 million, the high-net-worth population in Asia grew by 5% in 2024, surpassing 850,000 individuals. Among them, the high-net-worth individuals in mainland China have reached 470,000, accounting for 20% of the global total. Assets managed in Hong Kong have historically come from both China (including Hong Kong) and overseas markets, each accounting for about half. Looking ahead, the continued growth of wealth in China and the Asia-Pacific region will continue to drive growth in the wealth management industry in Hong Kong. Hong Kong's status as a hub for asset and wealth management in the region is also supported by its own advantages. In the current uncertain environment, Hong Kong's mature financial markets, reliable linked exchange rate system, stable banking system, and active capital markets provide an ideal platform for international capital to achieve steady growth and offer a wealth of investment opportunities. In the first half of 2025, Hong Kong's IPO fundraising amounted to over HK$100 billion, ranking the highest globally. Sales of investment products from banks have also been strong, with a significant increase in retail banking transactions from HK$819 billion to HK$1.774 trillion from 2022 to 2024, and private banking transactions increasing from HK$2.975 trillion to HK$4.466 trillion. During the same period, the number of client accounts for securities, futures, and asset management services at banks increased from 3.71 million to 4.3 million, while total revenue from securities, futures, and asset management businesses increased from HK$37.7 billion to HK$46.4 billion, demonstrating steady growth. More importantly, as a "super-connector" linking mainland China with international markets, Hong Kong plays an indispensable role in promoting cross-border asset allocation and two-way capital flows. Policy Measures Stimulate Industry Vitality We will not stop at this, as the government, Hong Kong Monetary Authority, and other regulatory agencies have been actively introducing various policy measures to leverage and enhance Hong Kong's unique advantages. This includes the official launch of the "Capital Investment Entrant Scheme" in 2024, as well as tax incentives for private equity funds, carried interest, and single-family offices to attract global funds to settle in Hong Kong. In terms of regulatory procedures, the Hong Kong Monetary Authority, in collaboration with the Securities and Futures Commission, introduced streamlined suitability assessment and product disclosure procedures for high-end professional investors in 2023. While ensuring investor protection, these measures provide the market with more flexible, convenient, and demand-oriented services. As of June 2025, seven private banks have adopted streamlined procedures, with nearly 200 high-end clients completing transactions totaling over HK$70 billion. An additional 13 private banks plan to implement streamlined procedures, with four expected to do so within the year. These 20 banks cover 80% of eligible client assets under management. In promoting individual cross-border wealth management, the optimization measures under the "Wealth Management Connect 2.0" introduced last year include increased quotas, expanded product range, relaxed investor thresholds, widened participation, and further improvements to sales and promotion arrangements. Recently, the Hong Kong Monetary Authority and mainland regulatory authorities jointly launched optimization measures under the "Wealth Management Connect 2.0" framework, including "one-time consent," "trilateral online meetings," and non-face-to-face account opening for southbound accounts, to allow banks to provide more effective sales and account opening services. We understand that Hong Kong banks have responded positively and have been implementing these measures: six banks have implemented the "one-time consent" arrangement to proactively introduce products and provide information to clients, while another 10 banks are planning to implement such arrangements. In addition, since the launch of "trilateral online meetings" in June this year, some banks have already introduced or are preparing to introduce related measures. Since the implementation of the optimization measures under "Wealth Management Connect 2.0," the market response has been positive. By the end of June this year, over 160,000 individual investors have participated, representing an increase of over 120% compared to "Wealth Management Connect 1.0"; for southbound accounts, the market value of holdings by investors from Hong Kong-exchange institutions exceeds RMB 16 billion, doubling compared to "Wealth Management Connect 1.0." As southbound investors become more familiar with Hong Kong market products and increasingly prioritize diversification, their product choices are becoming more diversified, shifting from primarily deposit products to more allocations in funds and bond products. Outlook for the Future We are confident in the prospects of the Hong Kong asset and wealth management market. The accumulation of wealth in mainland China, as well as the expansion and optimization arrangements of various connect programs, will further broaden the client base of the wealth management industry in Hong Kong. The uncertainties in the macro environment have also prompted international investors to actively seek diversified investment strategies to mitigate risks, especially with the increasing allocation of Chinese and Renminbi assets. Capital flows have fully supported this: according to EPFR data, from April to late July 2025, investment funds netted approximately $91.5 billion into Asian markets, with around $44.3 billion of net funds flowing into the Chinese market. The development of digital asset business in Hong Kong banks is also showing rapid growth. After the introduction of relevant regulatory guidelines, more banks have been exploring the sale of digital asset-related products and tokenized assets, as well as digital asset custody services. As of mid-July 2025, 22 banks have been approved to sell digital asset-related products, 13 banks have been approved to sell tokenized securities, and five banks have been approved to provide digital asset custody services. The total transaction volume of digital asset-related products and tokenized assets by banks in the first half of 2025 reached HK$26.1 billion, up 233% compared to the same period last year and exceeding the total transaction volume for the entire previous year. Several asset management companies have also announced plans to launch tokenized products, and with the government actively promoting tokenized bond issuances, we believe that the growth momentum in the field of digital assets in Hong Kong will continue, providing new impetus for the development of the wealth management business in Hong Kong. Hong Kong is expected to become the world's largest wealth management center in the coming years. The Hong Kong Monetary Authority will continue to work closely with the government, industry, and the international community to promote policy innovation and market optimization, further enhancing Hong Kong's competitiveness and solidifying its leading position as an international hub for wealth management and asset allocation. Hong Kong Monetary Authority Chief Executive Eddie Yue August 4, 2025