The expansion and optimization of Bond Connect "South Link", the trial operation of the gold central clearing and settlement system, and the launch of five-year RMB treasury bond bond futures... Hong Kong has recently intensively launched a number of financial initiatives, covering fixed income and currency markets, gold markets, offshore RMB business and other fields.

Analysts point out that the new measures are precisely aligned with the national "15th Five Year Plan" outline, providing strong support for Hong Kong's upcoming first five-year plan. The package of measures will form a joint force to help Hong Kong make efforts in fixed income and currency markets, offshore RMB business, and other fields, continuously stimulate development momentum, and strengthen the comprehensive competitiveness of the international financial center.

Pan Gongsheng, President of the People's Bank of China, said recently at the Hong Kong Fixed Income and Currency Summit and Bond Connect Forum that relying on the mainland is Hong Kong's unique advantage. Against the backdrop of rising global uncertainty, Hong Kong, as a bridge connecting the mainland and overseas, will gain important development opportunities from the opening up of the mainland financial market and the internationalization of the renminbi.

Expand and optimize 'Southbound Connection'——

Further increase interconnection and intercommunication

As an important channel for the interconnection between Hong Kong and the mainland financial markets, the expansion and optimization of the Bond Connect "southbound link" attracted market attention.
According to the introduction of the Hong Kong Monetary Authority, the annual net investment limit of Bond Connect "South Link" will be increased from 500 billion yuan to 800 billion yuan. The "South Link" bonds will be included in the repurchase, and the product range will be expanded to Hong Kong dollar bonds and RMB bond related products.
In recent years, the Hong Kong bond market has steadily developed, laying the foundation for the expansion and optimization of the "Southbound Link". According to a report by the International Capital Markets Association, Hong Kong has been named the largest international bond issuance hub in Asia nine times in the past decade. By 2025, approximately 25% of Asian international bonds will be issued through Hong Kong arrangements, with about 70% of the total offshore bond issuance by mainland enterprises taking place in Hong Kong.

The expansion will bring new momentum to the development of Hong Kong's financial market, "said Yu Weiwen, the Chief Executive of the Hong Kong Monetary Authority. This will provide greater investment space, richer and more diverse choices for investors of the" Southbound Link ", and meet the needs of overseas asset allocation; Assist in attracting more domestic and foreign issuers and investors to participate in the Hong Kong bond market, and promote the development of diversified products.

Zhang Yifei, a senior lecturer at the School of Economics and Management of the University of Hong Kong, believes that the original quota for "Southbound Link" was tight, and this increase in quota is a timely confirmation of demand. In addition, the inclusion of "Southbound Connect" bonds in the repurchase is equally significant. This arrangement supports institutions to use held bonds for collateral financing, effectively activating liquidity and accurately solving the allocation problems of insurance and wealth management funds.

Layout of fixed income and golden track——

Cultivate a diversified market ecosystem

The free flow of funds is a prominent advantage of Hong Kong, and how to attract funds to "anchor in Hong Kong" is particularly crucial. Analysts believe that building a diversified financial market ecosystem is an important path to attract sustained concentration of cross-border funds.

Hong Kong's fixed income and money markets have enormous potential for development. In September 2025, Hong Kong released the "Roadmap for the Development of Fixed Income and Money Markets", focusing on the development of primary market issuance, secondary market liquidity, offshore RMB business, and new generation infrastructure, aiming to develop Hong Kong into a global hub for fixed income and money markets.

Pan Gongsheng expressed support for the development of diversified financial markets in Hong Kong. He introduced that the People's Bank of China would launch five-year RMB treasury bond bond futures in Hong Kong, support the development of the Hong Kong gold market and promote the interconnection between Hong Kong and the mainland gold market.
As the first treasury bond bond futures in Hong Kong, five-year treasury bond bond futures will become an important milestone in the construction of the fixed income and money market ecosystem in Hong Kong. Chen Yiting, CEO of the Hong Kong Stock Exchange Group, said that treasury bond bond futures are an important supplement to Bond Connect and will work together with swap link to provide efficient risk management tools for overseas investors investing in China's bond market and promote the development of the RMB product ecosystem in Hong Kong.

Against the backdrop of complex and ever-changing global geopolitical situations, the allocation value of gold in diversified investment portfolios continues to be highlighted. In early July, Hong Kong officially launched the trial operation of the gold central clearing and settlement system, filling the gap in the central clearing infrastructure of the Hong Kong gold market and helping to build a full chain gold trading ecosystem.

To enhance the attractiveness of funds, the Hong Kong Stock Exchange is focusing on enriching its product "shelf". Chen Yiting stated that the Hong Kong Stock Exchange is expanding its diversified asset ecosystem layout, providing investors with comprehensive asset allocation and risk management tools.

Increase liquidity supply——

Empowering the Development of Offshore Renminbi

Hong Kong is an important hub for cross-border RMB settlement. According to data from the People's Bank of China, Hong Kong handles over 70% of cross-border RMB settlements worldwide. With the accelerated evolution of the international monetary system towards multipolarity, the international demand for RMB is extending from trade settlement to broader fields such as investment, financing, valuation, and reserves. The development of Hong Kong's financial market is also facing new opportunities.

Pan Gongsheng announced that he will support the Hong Kong Monetary Authority's RMB business funding arrangement from the current RMB 200 billion to RMB 500 billion, and extend the usage period to no more than 3 years.

For the financial industry in Hong Kong, this is the most direct benefit, "analyzed Zhao Wenli, Managing Director and Chief Economist of CCB International. This means that Hong Kong banks can obtain larger and longer term RMB funds to support trade financing, corporate loans, and other cross-border RMB businesses.

Where will the funds for expansion flow to? Liao Yijian, Co CEO of HSBC Group in Asia and the Middle East, believes that expansion and optimization will significantly improve the liquidity of the offshore RMB market, directly supporting the real economy. He analyzed that currently mainland enterprises are accelerating their global layout of industrial chains, and Hong Kong can provide them with comprehensive financial services such as trade financing and fund management.

In addition, the Hong Kong Monetary Authority has also launched multiple offshore RMB related measures, including offshore RMB liquidity bidding mechanisms, offshore RMB short-term debt instruments, and a bilateral currency trading framework for offshore RMB and Indonesian Rupiah.

These measures will jointly promote Hong Kong's upgrade from a 'RMB settlement center' to a 'RMB asset and risk management center', consolidating its position as the world's largest offshore RMB business hub, "said Zhou Hao, Chief Economist of Guotai Junan International.

Looking ahead, Zhou Hao believes that as policies are gradually implemented, the functions of Hong Kong as an international financial center will be further enhanced. In the long run, relevant measures will promote the Hong Kong market to shift from a focus on the stock sector to a multi asset layout that combines stocks, bonds, currencies, commodities, and derivatives. By relying on a diversified market structure to hedge the risk of cyclical fluctuations in a single track, we will continue to consolidate our core competitiveness.

(According to Xinhua News Agency Hong Kong reporters Zheng Jingxia and Liu Yinglun)