Chairman of the Hong Kong Securities and Futures Commission, Huang Tianyou: Make good use of the Hong Kong capital market to help Chinese companies go global.

On May 29, Dr. Carlson Huang, the chairman of the Hong Kong Securities and Futures Commission, delivered a speech at the forum "New World Order - China's Enterprise Era of Maritime Expeditions" at the Faculty of Business and Economics at the University of Hong Kong. In recent years, a saying has been circulating in the mainland business community: "If you don't go offshore, you will be left behind". This not only reflects the reality of market competition, but also points out the necessary path for enterprises to break through development bottlenecks and enhance competitiveness. With the global economic and trade landscape undergoing rapid restructuring and market competition intensifying, enterprises must formulate strategies, allocate resources, and build resilience with an international perspective. Dr. Huang shared his views on three aspects: firstly, the strategic value of mainland enterprises going offshore; secondly, how to leverage the Hong Kong capital market to promote internationalization; and thirdly, how Hong Kong can continue to enhance market quality and consolidate its position as the preferred financing platform. I. Why go offshore: From market expansion to value reshaping The "going out" of mainland enterprises is not just about market expansion, but a strategic choice to achieve high-quality development. Its significance can be seen in four aspects: Firstly, opening up new growth curves to unlock shareholder value. Going offshore can diversify the risks of a single market, forcing enterprises to innovate, upgrade products, and build brands to global standards. This catalyzes the transformation of enterprises from "quantity" to "quality", moving from scale expansion to value creation. Data shows that the overseas income of leading mainland companies in the Hang Seng H-Share Index ETF index components has reached 20%, confirming that internationalization has become an important pillar for sustainable growth performance. Secondly, benchmarking international rules to drive governance upgrades. The challenges of operating across borders often lie not in the market, but in corporate governance. Listing is not just a financing activity, but also an opportunity for governance upgrade - aligning internal controls, risk management, information disclosure, and investor relations with international standards. Governance improvements under institutional norms drive enterprises to establish a solid foundation in a complex and ever-changing global environment. Thirdly, integrating into national strategies to promote high-quality development. The direction of enterprise offshore operations is highly aligned with the high-level opening-up in the national "15th Five-Year Plan", the construction of a strong financial nation, and the modernization of the industrial system. Enterprises gather global capital, technology, and market resources to accelerate towards the high end of the value chain, using their overseas business to contribute to the technological self-reliance of the country and the security of the industrial chain. Fourthly, building and sharing to contribute to global prosperity. The going offshore of Chinese enterprises is not just an extension of the business map, but also a practice of technology sharing, green transformation, and infrastructure construction. Along the Belt and Road, enterprises are not only exporting products, technology, and production capacity but also a mutually beneficial and sustainable development model that becomes an important force driving global prosperity together. II. The value proposition of Hong Kong: Strengthening the offshore strategy through an international capital ecology Since going offshore is beneficial to enterprises, investors, countries, and the world, what are the effective approaches for mainland enterprises? One of the answers is to leverage the platform of the Hong Kong capital market. The key to the success of enterprises going offshore lies in their ability to quickly adapt to the international market. There are significant differences in regulations, regulatory standards, and business environments among different countries. Inadequate risk management, information disclosure, or internal control mechanisms can severely affect operational stability. Therefore, a global layout needs to be tailored to local conditions and flexibly utilize arrangements such as joint ventures and franchising. Hong Kong's international capital market can provide targeted solutions. Under the "one country, two systems" framework, Hong Kong, with clear and stable financial regulation, internationally accepted market rules, and a commitment to market integrity, has long earned the dual trust of mainland enterprises and global investors. Since the listing of the first H-share in 1993, Hong Kong has been a bridgehead for mainland enterprises to connect with international capital. Over the past thirty years, mainland enterprises' total stock financing in Hong Kong has exceeded HK$8.6 trillion. As of the end of April this year, nearly 1,600 mainland enterprises have been listed in Hong Kong, with a total market value of HK$37 trillion, accounting for nearly 80% of the total market value in Hong Kong. The core advantage of Hong Kong in assisting enterprises in going offshore lies in the integration of "capital, system, and expertise": Firstly, the Hong Kong capital market serves as an accelerator for enterprise development. It injects continuous and abundant capital into overseas mergers and acquisitions, production layout, and market cultivation. The market provides various channels such as listing, refinancing, and bond issuance to effectively optimize the capital structure. Many enterprises only realize after going offshore that the most costly aspect is not the initial construction but the continuous investment in the future - from team building to regulatory compliance, from supply chain development to after-sales service system, every step requires stable, flexible, and sustainable capital support. Hong Kong can meet the financial needs of enterprises throughout their lifecycle. More importantly, the Hong Kong market has a high proportion of institutional investors and international funds, effectively attracting high-quality investors such as sovereign wealth funds and long-term capital from overseas. They focus more on the fundamentals and growth prospects of enterprises, providing an internationally compliant capital platform for enterprises with a long-term value orientation, helping to establish a stable, rational pricing, and resource allocation mechanism. Good governance will become the passport for enterprises to go global. Secondly, Hong Kong's mature legal system and transparent regulation align with global standards, continuously upgrading its listing system to provide strong support for mainland enterprises, especially technology companies, to go offshore. In recent years, the Hong Kong Securities and Exchange Commission and the HKEX have cooperated to launch several reforms, optimizing thresholds and improving approval efficiency, making it particularly convenient for A-share listed companies and specialized technology and biotechnology companies to raise funds in Hong Kong. These reforms enable enterprises to quickly access international capital, support overseas mergers and acquisitions, and global expansion, empowering innovative enterprises in artificial intelligence, new energy, biotechnology, etc., to accelerate their "going out" and achieve rapid development. Thirdly, Hong Kong has a global-leading financial professional service ecosystem, bringing together top investment banks, international law and accounting firms, to provide enterprises with comprehensive support. Enterprises can leverage these professional institutions to conduct due diligence, valuation, and financing structure design for cross-border mergers and acquisitions, as well as accurate compliance review and risk control solutions, enhancing the success rate of execution. This comprehensive ecosystem is the solid backing for enterprises to set sail offshore. III. Continuous optimization: Consolidation as the preferred international financing platform Hong Kong has its advantages, but it must continue to improve in the face of global financial center competition. The Hong Kong Securities and Futures Commission will work with the Special Administrative Region government, the Stock Exchange of Hong Kong, and the financial industry to focus on five directions: Firstly, strengthening the foundation. Enhance market quality and investor protection, attract quality enterprises to Hong Kong, and ensure that the Hong Kong market continues to win global trust; Secondly, attracting international capital. Broaden international funding channels, actively attract overseas long-term institutional investors, and let the world share the benefits of national high-quality development; Thirdly, perfecting the system. Optimize listing and refinancing mechanisms, revitalize the secondary market, and efficiently support the financing needs of enterprises at different stages of development; Fourthly, diversified expansion. Deepen the fixed-income and currency markets, enrich financing channels, and strengthen the offshore renminbi ecosystem; Fifthly, benchmarking internationally. Align with global standards in areas such as corporate governance and sustainable disclosure, and assist listed companies in Hong Kong in integrating into the international capital ecosystem. As the regulator of the capital market, the Hong Kong Securities and Futures Commission is not only the guardian of order but also the builder of the ecosystem. It is dedicated to creating a stable, transparent, and competitive market environment, safeguarding the rights and interests of investors, and empowering mainland enterprises to expand globally through institutional innovation, deeply integrating into the global value chain.