We are the only place in the world that practises an English and Chinese bilingual common law system that inspires confidence from overseas and Mainland investors alike. We have an ecosystem of topnotch financial institutions and professional services firms that are trusted by asset owners and asset managers to look after their investments. These unique advantages cannot be easily replicated anywhere else in the world. 15. Of course, apart from providing a convenient conduit for overseas investors to enter the onshore equities and bond markets through the Connect schemes, Hong Kong’s stock market has long been a venue for Mainland companies to raise funds and for global investors to get exposure to Mainland enterprises. Today, over 1,100 Mainland enterprises are listed on the Stock Exchange of Hong Kong, with a total market capitalisation of nearly HKD22 trillion and an average daily trading volume of around HKD60 billion. 16. And we are not standing still. We are doubling down on our work to enhance our financial platforms, build more connections with the Mainland’s markets and consolidate our strengths. 17. One exciting example is the two-way cross-boundary wealth management connect scheme for Greater Bay Area residents, announced earlier this month. This new Connect scheme links up Hong Kong’s asset management industry to one of the most economically vibrant and wealthy regions in Mainland China, with a population of 60 million and a per-capita GDP of some $ Guangdong is also home to some 290,000 high net worth families.
Since the benefits are mainly the result of structural improvements and the costs are due largely to the greater difficulty in steering inflation and economic activity, it is difficult to offset the advantages of a monetary union against its disadvantages. Whether a monetary union, on balance, creates benefits or causes costs depends on a whole range of factors. Robert A. Mundell can be summarised as follows: in order to form a so-called optimal currency area, the member countries must be structured along similar lines and exhibit a high degree of flexibility. The benefits of a monetary union consist in a reduction of transaction costs for changing money, the elimination of internal exchange rate uncertainty, tighter competition thanks to easier price comparisons, the expansion of trade within the common currency area, the prevention of competitive depreciation and speculative attacks on a currency, and growth in the liquidity of the financial markets. The most significant costs of a currency union arise from the loss of the individual countries’ independent monetary policies. The loss of monetary policy autonomy is particularly felt when the size or number of asymmetric shocks is large. Such disruptions affect the economic structure, business activity and inflation of member countries in different ways. Thus, they cannot be combated with a uniform economic policy. A controversy that has not yet completely died down is this: was the reunification of the two Germanys after 1989 a shock that significantly impaired the prospects for a successful integration of Germany into the European Monetary Union?