"There is a great urgency for China to develop an international financial center of global significance within its own borders," said David Li, a lawmaker of the Legislative Council of the Hong Kong Special Administrative Region (HKSAR), in Hong Kong Monday.

Li was speaking as convenor of a focus group on financial services, one of four groups the HKSAR Chief Executive established at an economic summit on "China's 11th Five-Year Program and the Development of Hong Kong" last September.

In its report to the Chief Executive Monday, the financial services focus group had six proposals and 80 specific recommendations. Chief among them was the need for Hong Kong to develop further as China's international financial center of global significance.

"We believe that Hong Kong has the infrastructure, the transparent legal and regulatory environment, and the market depth to contribute in these areas for the benefit of the entire Mainland economy," he said.

He stressed the window of opportunity will not last forever. " If we do not act now, inertia will set in, and the business will gravitate to established financial centers overseas."

The report offered a five-pronged strategy to pursue the nation's economic development and financial reform in a more significant manner.

It includes enhancing the presence of Hong Kong financial intermediaries in the Mainland to provide financial services on location, and enhancing the outward mobility of investors, fund raisers and financial intermediaries.

It also includes allowing financial instruments issued in Hong Kong to be marketed in the Mainland, enhancing the capability of Hong Kong's financial system in handling financial transactions denominated in renminbi, and strengthening financial infrastructure linkages between the Mainland and Hong Kong.

"As an international financial center, we should take steps to make it easier for overseas issuers to list in Hong Kong. Efforts should also be made to establish a more flexible regulatory and operational infrastructure for local, Mainland and overseas financial intermediaries and investors," he said.

On the development of a renminbi futures and options market, he proposed consolidating Hong Kong's lead in offshore renminbi, and expanding the range of non-deliverable renminbi products.

Li noted that China is one of the world's largest consumers and suppliers of commodities, precious metals and other raw materials.

"There is an increasing need for efficient price discovery within our time zone. As a first step, we propose that an independent consultancy study be commissioned with a view to making concrete proposals for developing a commodities futures market in Hong Kong," he said.

Another chief recommendation was to establish an effective insurance market and asset management sector. These, he said, are essential for efficient risk management, financial intermediation, and wealth preservation within the Mainland.

"We also propose that Hong Kong promote itself as a center for international captive insurance, that we expand the opportunities for Hong Kong residents to become Mainland insurance practitioners, and that we foster the further development of the asset-management industry," he noted.

(Xinhua News Agency January 16, 2007)